Of roughly 7,000 captives operating worldwide, only about 200 currently write employee benefits business, according to Franck Baron, chief risk officer at International SOS and president of the International Federation of Risk and Insurance Management Associations. That ratio - less than 3% of captive capacity applied to one of employers' fastest-rising cost lines - describes a structural opportunity that practitioners and analysts say is beginning to close, driven by rising medical costs, broader access to captive structures, and the accumulated evidence of savings at organisations that made the move earlier.
Baron oversees one of those 200 programmes. His captive strategy is anchored by a long-standing Singapore-domiciled captive, expanded last year with a separate US-domiciled entity supporting International SOS's risk financing strategy across its North American footprint. Speaking ahead of a Captive Insurance Companies Association panel on employee benefit design, Baron said the structure has become a long-term strategic platform rather than a cost-reduction tactic.
"We have used our captive as a long-term strategic platform for our employee benefits programme, with a clear focus on sustainable financial performance rather than short-term optimisation," Baron said. "Over time, the captive has enabled us to retain underwriting results, smooth volatility, and improve predictability across cycles, creating measurable value for the parent company."
The financial case for captive benefits has strengthened alongside medical inflation. Aon's Global Medical Trend Rates Report projects a 9.8% global medical trend rate for 2026, down slightly from 10% in 2025 but still elevated by historical standards. Companies managing benefits across countries, insurers and renewal cycles as disconnected decisions are increasingly pooling that risk centrally through a captive, giving them a clearer view of claims, cost and trends, according to Willis Towers Watson partners Peter Carter, Julien Gaillard and Kathy Huynh.
Sven Roelandt, Aon's global head of employee benefits financing, said interest is broadening as the structures become more familiar across peer groups - a shift from early adoption to sector-wide consideration among large multinationals.
Ratings agency data backs the cost argument. AM Best-rated US captives generated an estimated $8.2 billion in savings for their parent organisations over the past five years, according to a Best's Market Segment Report published in July 2026. Sharon Marks, an AM Best director, said: "This trend reinforces AM Best's view that captives are increasingly regarded as long-term strategic risk-financing mechanisms."
QBE North America has separately argued that captives change employers' fundamental relationship to risk. Structured well, captives let employers be "not just buyers of insurance, but stewards of risk management," the insurer has said, pointing to reduced frictional costs and underwriting margins as key drivers.
Access to these structures has also broadened. Companies no longer need to be among the largest, or already operate a property and casualty captive, to bring benefits in-house. WTW noted that some programmes now start with modest premium volumes tied to US medical stop-loss cover alone - a lower entry point than the market has historically required.
Bringing US benefits into a captive carries extra regulatory steps that are not present in other regions. Life, accident and disability benefits require a Prohibited Transaction Exemption from the Department of Labor before they can be reinsured into a captive, a process that calls for independent fiduciary oversight and clear evidence the arrangement serves plan participants.
Those exemption procedures were tightened in 2024, when the DOL finalised amendments increasing the information applicants must supply and expanding the department's discretion to deny requests, according to Groom Law Group's analysis of the Federal Register filing. As a result, US benefits programmes typically take longer to bring into a captive than coverages in other regions, WTW said.
For benefits brokers advising large domestic or multinational employer clients on rising healthcare costs, the captive question is worth raising earlier in the planning cycle than most currently do. The relevant client profile is a large employer - typically self-funded, with a stable multi-year claims history and benefits spend substantial enough to make the regulatory and administrative overhead worthwhile. A multinational with operations in multiple countries is a natural candidate, given that captives can consolidate risk across geographies that would otherwise be managed as separate renewal conversations.
WTW recommends a phased approach before any commitment: a feasibility review of premium volume and expected claims, an assessment of operational readiness across data and multi-country governance, and a clear statement of objectives. That sequence is exactly the kind of structured analysis a broker is positioned to lead - and in a cost environment where employers are looking for structural solutions rather than incremental plan design changes, the broker who puts the captive question on the table early is the one whose advisory role is hardest to replicate at the next renewal.
