In 2023, Marsh Captive Solutions added 125 new captives, bringing the total in new formations to about 500 over the past four years. Our global captive portfolio accounts for approximately 2000 entities writing $73 billion in premiums, with more than $120 billion in surplus, in 56 domiciles. The following are some summary findings and analysis based on 2023 data from Marsh managed captives.
- Traditional property and casualty coverages represent the single largest type written by Marsh-managed captives. In 2023, captive premiums for property risks increased by 29%. Casualty premiums — which principally come from auto, general liability, workers’ compensation/employer’s liability, excess liability, product recall, and medical malpractice —increased by 14% in 2023.
- Employee benefits are another growing area, accounting for about 20% of Marsh’s global captive portfolio. We are seeing numerous captives funding medical stop loss and international employee benefit programs.
- Premiums for directors and officers (D&O) liability increased by 49% in 2023.
- Premiums for commercial life premiums increased by 25% in 2023.
- Premiums for cyber liability increased by 17% in 2023.
Domicile trends
Captive premiums in Asia Pacific continue to grow, rising by 4%
The rate of growth moderated compared to previous years due to three main factors:
- Easing of hard market conditions in traditional markets.
- Property values stabilising after three years of significant increase.
- Retention levels of captives remaining unchanged from the previous year compared to significant increases taken on in prior years in reaction to the hard market.
Globally, Canada is one of the fastest-growing regions, with captive premiums up 78% in 2023 as Canadian captive owners embrace alternative risk transfer. Much of this growth is in Alberta, which opened to captive formations less than two years ago.
The bulk of international captive premium growth was in the UK (Guernsey) and Europe, where premiums increased by an average of 15% in 2023. Top growth domiciles were Dublin, Guernsey, Malta, and Luxembourg. Much of the growth is driven by an increased interest in protected cell companies, and proportionality developing in EU regulation as the region embraces a proportional approach to insurance solvency regulation that scales to captives’ size.
Industry trends
Communications, Media & Technology captives are the top industry by amount of lines of coverage written globally
20% of Communications, Media & Technology (CMT) captives own more than one captive entity, with many writing property, cyber, umbrella/excess, extended warranties, medical stop-loss, and others.
Healthcare captives, meanwhile, are taking different forms. About two-thirds of Marsh’s healthcare captives are single-parent entities, almost a fifth are cell captives, and 13% are risk retention groups. We also found that many companies in these industries own more than one captive.
In Asia, it is difficult to distinguish and identify particular industries that lead in coverage being written as the majority of captives in the region are set up by large conglomerates with diverse businesses. However, there is a notable increase in demand for captives among businesses in the energy and power sector due to capacity constraints in the retail insurance market.
Interest in Protected Cell Captives (PCC) is also increasing in Asia, with many companies using cells as a prelude to setting up their own captive.
Limits vary across lines of business and industries
According to Marsh’s analysis, more than 85% of captives globally that insure property risks write limits exceeding $10 million. In financial lines, about 65% of captives funding D&O liability write limits of more than $10 million. For cyber liability, limits continue to vary widely across our captive portfolio.
We also found that 55% of Marsh-managed captives that write automobile liability offer limits of $1 million to $2 million, while 45% that insure general liability write limits less than $5 million.
For more information on Marsh Captive Solutions, visit Captive Insurance page.
