Singapore and Hong Kong SAR are set to introduce frameworks for protected cell companies (PCCs), bringing new options to businesses in Asia that are looking for more effective ways to finance hard-to-insure risks. With only 5–6% of global captives currently Asian-owned, these frameworks could make captive insurance significantly more accessible across the region.
Why do structural protection gaps persist in Asia?
Geopolitical fragmentation, cyber threats, climate volatility and interconnected supply chains have widened the protection gap. Insurers are restricting capacity, raising premiums in some segments, and introducing exclusions that leave businesses exposed. Organisations cannot insure all the risks that matter, and the cost of insurance available is rising faster than budgets.
Why traditional insurance alone can’t close protection gaps for globally expanding companies
Businesses operate in a fundamentally more volatile world. Geopolitical shocks ripple through supply chains in days rather than weeks, raising costs and delaying revenue. A single cyber incident at a critical supplier can take down a multinational’s operations for weeks, creating losses that exceed cyber insurance limits. Climate events are showing up on balance sheets. Meanwhile, supply chain complexity has created hidden exposures that cause material losses at suppliers, logistics hubs, or infrastructure operators that conventional policies do not cover.
The strategic pivot toward captive insurance
Captives allow organisations to retain and finance selected risks through an insurance structure they own or access. It is a strategic capability that enables organisations to control their risk narrative, access capital markets more directly, and build resilience into enterprise value. In doing so, they can gain greater visibility over loss trends, more control over claims management, and a more tailored approach to risk financing. Globally, captive use continues to expand. In 2025, Marsh-managed captives wrote $79.1 billion in gross written premiums compared with $77 billion in the prior year, and among Fortune 500 organisations that use captives, the growth was 9%.
Why a single-parent captive may not be right for every organisation
While a single-parent captive can offer significant control, it also comes with historical barriers that may make it less suitable for some businesses:
- Offshore domicile requirement
Establishing a captive in Bermuda, the Cayman Islands or other traditional jurisdictions requires travel, complex tax planning, and higher minimum capital requirements.
- Limited local expertise
While Singapore, Hong Kong and other regional hubs have insurance talent, specialised captive consulting, management and regulatory experience were once concentrated in London and Bermuda.
- Cost and complexity
Single-parent captives require significant capital commitment, governance overhead, and ongoing regulatory compliance. The return on investment may be historically perceived as suitable only for large corporates with complex global risk profiles.
Why can a protected cell company be a game changer?
A protected cell company (PCC) is a single licensed insurer comprising a central core and individual segregated cells.
Each cell operates as its own balance sheet — legally separated from other cells and the core — while sharing infrastructure and captive management services. For mid-market corporates, this can dramatically reduce the cost and complexity of accessing captive insurance.
The introduction of PCC frameworks in Singapore (2028) and Hong Kong (2026 Policy Address) fundamentally changes the game for Asian corporates. PCCs address all three aforementioned historical barriers:
- No need for offshore domiciles
Singapore and Hong Kong PCCs operate as regional hubs. No need for offshore structures; operations and management remain local.
- Cross-border expertise
Marsh operates PCCs across North America and Europe; our Asia team of 40 specialists brings that global expertise and local presence.
- Lower cost and capital
PCC cells require less capital than standalone captives and share infrastructure with the core. Setup costs drop by 40–60%; ongoing management costs reduce by 30–40%.
Is captive insurance right for your organisation?
Not every organisation needs a captive. But if you answer ‘yes’ to most of these questions, a captive — or PCC cell — should be part of your risk financing strategy:
- Are you paying 15–30% annual premium increases for risks that your business could retain more efficiently?
- Are there coverage gaps — risks that are uninsured or underinsured because traditional insurance is unavailable, unaffordable or excluded?
- Do you face volatile commodity, energy, or supply chain costs that propagate through your business but are not covered by traditional business interruption policies?
- Would greater visibility and control over claims management — and the ability to pool risk across business units or geographies — strengthen your risk financing strategy?
- Are you managing complex, multi-peril or multi-jurisdictional exposures that commercial insurers are reluctant to aggregate or price correctly?
The path forward: Three steps to captive readiness
The window of opportunity is narrowing. As PCC frameworks approach, organisations that move early may gain first-mover advantages that include lower costs, premium positioning in PCC structures, and immediate access to reinsurance markets.
Step 1: Run a captive feasibility study
A feasibility study is a rigorous analysis of whether a captive structure would reduce your risk financing costs, improve coverage certainty, and align with your strategic objectives. Marsh has completed more than 1,000 feasibility studies globally, including over 200 in Asia Pacific.
A typical study includes:
- Risk profile analysis.
- Premium and cost benchmarking against peers.
- Capital requirement modelling.
- A comparison of single-parent vs. PCC cell structures.
- Regulatory and tax considerations.
- A detailed financial case showing when and where captive insurance adds value.
Step 2: Build your roadmap
Once feasibility is established, your next step is to define the specific structure: single-parent captive, PCC cell, or a hybrid architecture. This requires input from your CFO, risk officer, tax advisers, and external counsel. Marsh can coordinate this across all parties and ensure alignment with regulatory requirements in your target domicile, whether Singapore, Hong Kong or other jurisdictions.
Key decisions in this phase include:
- Which risks to retain in the captive and which to transfer to commercial insurers.
- Reinsurance strategy.
- Capital structure.
- Governance and oversight.
- Claims management and loss prevention.
Step 3: Execute and optimise
Once your captive is established, the real value begins. You now have:
- Control over your risk narrative.
- Direct access to reinsurance markets.
- The ability to design coverage that reflects your actual risk profile.
- Flexibility to adjust your risk retention and transfer strategy as your business evolves.
Marsh’s ongoing role is continuous optimisation of your captive structure, annual risk assessments, reinsurance placement, claims advocacy, and regulatory compliance.
Why Marsh
Marsh engages with regulators on captive initiatives and consultations across major North American, European and Asia-Pacific domiciles. We help government stakeholders assess, design and advance captive and PCC frameworks.
We also set up and manage PCCs, including our own Mangrove cell facilities across major North American and European domiciles. Marsh’s Nexus Captive Solution, our turnkey PCC, is built for international employee benefits and helps employers tackle rising healthcare costs.
Our captive practice at a glance:
- The world’s largest captive manager, with more than US$79 billion in premium across every major domicile and structure type.
- Around twice as many captives as our closest competitor globally, and approximately 2.5 times as many in Asia.
- A dedicated Asia team of 40 specialists, with close to half having 10 to 30 years of captive and insurance experience.
- More than 1,000 feasibility studies across industries and geographies, including Asia Pacific.
Ready to explore whether captive insurance fits your organisation?
Contact Marsh Risk Asia for a confidential consultation and feasibility study. Organisations that start their assessments now will be positioned to move quickly once PCC frameworks are finalised.
Frequently asked questions
What will Singapore's PCC framework cover?
MAS has proposed three use cases for PCCs: captive insurance, insurance-linked securities, and sovereign risk pools. Each cell's assets and liabilities would be statutorily segregated within a single legal entity. MAS consulted on the framework in 2026 and plans a second consultation on the draft legislation. The exact details, including how cells will be licensed and capitalised, will only be clear once the framework is finalised.
Can an existing offshore captive move to Singapore PCC?
MAS has proposed allowing equivalent structures from other domiciles to redomicile into Singapore and allowing conversion between PCCs and traditional company structures. Organisations with an existing offshore cell or captive may want to assess the option when the rules are finalised.
Are protected cell companies the same as segregated cell companies?
Broadly, yes. The same cell concept goes by different names depending on the domicile, such as segregated portfolio companies in the Cayman Islands and segregated accounts companies in Bermuda. The principle is the same: assets and liabilities are legally ring-fenced by cell.
Does any jurisdiction in Asia already allow PCCs?
Yes. Labuan, Malaysia's international business and financial centre, already permits protected cell companies. The Singapore and Hong Kong proposals would add PCC options in two of Asia's established insurance hubs.
What types of risk can a cell captive hold?
Cells can hold a range of exposures, including property and casualty, cyber, and employee benefits. The Marsh Nexus Captive Solution, for example, is a PCC built for international employee benefits. Read more about the benefits of captive insurance in a soft market.
