There has been a notable expansion of captive formation and use by managed care organisations since 2021 and, compared with recent years, captive dissolutions are down.
Companies are using the structure to support differences in conditions and differences in limits of commercially placed insurance programs, as the commercial market imposes increasingly restrictive coverage terms.
Bermuda and the Cayman Islands have seen particularly strong growth in the number of new captive insurance licenses issued, largely driven by new business from North America. Although additional activity has been seen from Latin America, Asia and Australasia.
The report also reveals that the captives that built capital and surplus during the soft market are better able to support new lines of insurance and offerings of limits to combat the effects of the lingering hard market.
WTW says that this ongoing shift in captive deployment not only reflects insurance market conditions, but is further enabled by better data and analytics capabilities.