Emerging Trends in Captive Insurance

Captive insurance has long been a strategic tool for organizations seeking to manage risk more effectively. Traditional structures, such as single-parent captives and group/association captives, offer controlled environments tailored to specific risk management needs.

• Single-Parent Captives: These allow companies to customize coverage to address unique risks, making them ideal for managing predictable loss patterns.
• Group/Association Captives: By pooling resources and risks, this model spreads liability and lowers costs, making it a practical option for smaller businesses that may face challenges in establishing a single-parent captive.

Historically, captives have retained the working layers of coverage for workers' compensation, commercial automobile liability and other lines of coverage with high loss frequency due to the predictability and credibility of their losses.

As the insurance landscape evolves, new trends are reshaping captive applications. Captives are increasingly being utilized to address property exposures, driven by the growing impact of natural disasters and property damage. This shift provides tailored solutions that traditional insurers may struggle to offer.