Global firms turn to captives in a challenging insurance market

Captives are growing in popularity as organisations struggle with the increasingly difficult insurance landscape. The impact of the pandemic has been a contributory factor.

Data in Marsh's latest Captive Landscape Report reflects steep premium volume growth in supply chain, business interruption, and contingent business interruption premiums, with Marsh-managed captives rising 283% on average in 2019. All-risk property premiums rose 64% on average, it said, led by the energy and financial institutions sectors, which saw all-risk property premiums rise 151% and 104%, respectively.

“Marsh formed a record 76 new captive insurance companies from January through July this year, up over 200% compared to the same period in 2019,” said Ellen Charnley (pictured), president of Marsh Captive Solutions. “While none of the new captives formed so far in 2020 specifically cover pandemic-related losses, organisations are using their captives to help navigate them through the global COVID-19 pandemic.

“Financial flexibility is one of the key advantages of owning captives, and since March 2020, Marsh has helped owners free US$3bn from their captives using short-term liquidity tactics, such as inter-company lending, to help them respond to cash-flow challenges brought on by the pandemic."

    Share Story:

Recent Stories

Your people and the pandemic: Are you doing enough?
Employee health, well-being and security have always been a vital part of risk management, and as organisations seek ways to ensure a smooth, successful and sustainable return to operations amid the evolving environment, careful consideration has to be given to all these areas, and quickly. Published August 2020

Responding to COVID-19: A safe and secure return to work
Learn more from the experts that worked on the recovery of the Diamond Princess. Published July 2020