Growth Of Captives

Growth of the Captive Market

As a middle market business, if you don’t have a captive insurance program in place, you may soon be left behind by your competition.  Insurance industry trends indicate that many middle market businesses will implement a captive or alternative risk strategy over the next few years. 

Modern captives began in Bermuda in the early 1960s, and captive insurance was formalized in the late 1970s, with a medical malpractice captive for Harvard University.

In recent years, the growth of captive insurance and related risk transfer mechanisms has boomed, driven relentlessly by businesses seeking to better manage insurance needs, including cost, coverage, service and capacity. 

When segregated cells, risk retention groups, and rent-a-captives are included, the number of captive and alternative risk arrangements today is in the tens of thousands, and is rapidly growing.

The market for alternative risks, including captives, is very large, far exceeding $100 billion of annual insurance premiums.  It is estimated that there are over 6,000 captives today, with more being formed each week.

Types of Captives