Global Captive Market Grows as US, Offshore Domiciles Compete

Captive insurance formations continued to rise in 2024, with the total number of licensed captives reaching 6,290 worldwide, according to Captive Domicile Rankings, newly released from Business Insurance, which are based on licensed entities and exclude micro-captives, series captives, and individual cells within protected cell companies.

Vermont retained its position as the leading global domicile with 683 licensed captives at year-end. The Cayman Islands followed with 670, making it the largest offshore domicile. Bermuda ranked third globally with 631. These top three jurisdictions held steady, while several US domiciles saw meaningful increases. Utah, for example, increased its total from 439 to 462 captives, nearly matching Vermont's growth in absolute numbers. Arizona also recorded significant growth, adding 25 new captives for a total of 201.

Barbados, Turks and Caicos, and Nevis followed Cayman and Bermuda among the top offshore domiciles. Guernsey and Luxembourg tied as the leading European domiciles, each with 197 licensed captives. Singapore led in the Asia-Pacific region with 89.

The report highlighted continued expansion in the use of captives across a range of risk types. Marsh reported a 29 percent increase in property premiums and a 17 percent rise in cyber premiums among its managed captives. Cell structures were increasingly used to fund medical stop-loss exposures and employee benefit risks.

Captives also played a growing role in climate risk strategies. As quoted in the report, "Our captive really plays a key role, not just in putting up a good insurance program globally, but also to fund the initiatives to manage long-term risks and help reduce future large claims or cat claims," said Deyna Feng, director of captive programs at Cummins Inc.

Medical professional liability is one area drawing increased captive interest due to rising jury awards and so-called nuclear verdicts, according to Anne Marie Towle, CEO of global risk and captive solutions at Hylant.

In Europe, potential regulatory relief under Solvency II and new domicile legislation in countries such as France and Italy could encourage further adoption. France entered the rankings with 19 captives, and other jurisdictions including Spain and the United Kingdom are considering captive frameworks.

Despite softening conditions in parts of the traditional insurance market, Business Insurance reported that demand for captives remained resilient as organizations continue to seek greater control over risk financing.