New Market Study Published: 2020 Foresight Report: Captive Insurance

Growing uncertainties in the global economy and frequent rises in premiums in the commercial insurance industry have encouraged companies from diverse industries to set up their own captive insurance businesses. Companies across a diverse range of industries are increasingly employing captive insurance as part of their risk management strategies. These companies are exposed to various risks and unforeseen circumstances, and it is often not feasible for them to obtain insurance cover for these risks due to high premiums in the commercial market and the non-availability of insurance cover for some industry-specific risks. The four-leading industries in the world, in terms of the number of captives established, are financial institutions, healthcare service providers, retail and consumer products companies and infrastructure companies, mainly construction and power and utilities. In terms of the number of captives domiciled on a global scale, the leading destinations include Bermuda, the Cayman Islands, Guernsey, Luxembourg and the US state of Vermont. The key reasons for the popularity of these locations are the relatively low taxes that they levy on captives, favorable foreign direct investment (FDI) regulations, the availability of competent professional manpower and geographical advantages such as proximity to the main regions of operations of the parent companies. Many captive domiciles such as Bermuda and Guernsey have agreed not to adopt standards equivalent to Solvency II.

Full Report Details at
- http://www.fastmr.com/prod/646753_2020_foresight_report_captive_insurance.aspx?afid=301

Key Highlights

* Increasingly, companies across the globe have been setting up captive insurance companies to save on insurance premium costs and also because of non-availability of certain types of insurance.
* Companies operating in the fields of financial services, healthcare, retail and consumer products and infrastructure, comprising construction and power and utilities, have been increasingly adopting the captive insurance business model.
* Financial institutions account for almost 20% of the total number of captives across the world. The risk management competencies of these institutions and the requirement of meeting Basel II/ III standards have been driving them towards the increased use of captives.
* The number of captives set up by healthcare entities is expected to increase significantly, with many driven by the Patient Protection and Affordable Care Act (PPACA), passed by the US government in 2010.

Scope

* This report provides a detailed analysis of the captive industry worldwide
* It explains the concept of captive insurance, the benefits that accrue from it and the types of captives that can be setup
* It details the main industries that have been employing captives and the recent trends for their increased use of captive insurance arrangements

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