Asia-Pacific registering strong growth in captive insurance industry

New and more complicated risks have increased uptake of captive insurance vehicles, report says

Asia-Pacific registering strong growth in captive insurance industry

Insurance News

By Gabriel Olano

Captive insurance vehicles are becoming more popular in various global regions as organisations seek new ways to manage risks, according to a report by Marsh.

According to Marsh’s 2018 Captive Landscape report, there was a 240% cumulative growth in the number of Marsh-managed captive insurers covering cyber risks between 2012 and 2017. In the same period, the number of captives insuring employee benefits increased by 550%. Meanwhile, captives writing terrorism insurance have increased by 83% in the past five years, Marsh said.

For the Asia-Pacific region, Marsh recorded a 24% rise in the number of captive insurance vehicles it manages, mostly for parent companies in Japan, China, Hong Kong, and Singapore.

The report revealed that 60% of owners maintain the captive as a formal funding vehicle to cover risks that the parent company has self-assumed, while 42% said that they maintain a captive to gain access to the reinsurance market.

Financial companies are the most common users of captives in terms of both number of firms and premium volume, the report said. It added that as new risks emerge and become more complex, and the number of mergers and acquisitions increase, these have encouraged firms in other sectors to adopt the use of captives.



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