Captive Industry Insights

Continued global turbulence is reinforcing the importance of robust risk management and risk financing strategies. While insurance market rate increases have eased in property, natural catastrophe and losses from secondary perils remain high. There continues to be deteriorating results in carrier casualty books driven by social inflation and third-party litigation funding. Rising healthcare costs and the impact of costly specialty drugs are leading to more employers using captives to manage these risks. Interest in parametric solutions, especially around climate and environmental risks, remains strong, as clients seek capacity that may not be available in traditional insurance markets. The resultant overall effect remains positive for captive activity and utilization remains strong as captive owners seek to maximize the value from having a captive. This is played out in terms of increased premiums going into captive, additional lines of risk, using analytics to optimize retentions and refreshed risk appetite statements.