The captive insurance industry experienced slow growth during 2015 but formations remained strong at 4.8 percent, according to Strategic Risks Solutions (SRS).
Speaking during a webinar reviewing 2015 for captive insurance, SRS president Brady Young revealed that there were of 498 new captive formations in 2015, or a net addition of 202. This growth spurt was down on 2014’s increase of 8.6 percent.
Most notably, there was a slowdown in small captive growth. Young believes this was due to increased Internal Revenue Service scrutiny after captives were added to the so-called ‘dirty dozen list’, uncertainty over the 831(b) tax code election and more cell formations than standalone captives.
He noted that closures were significantly higher last year, increasing 75.1 percent from 2014. Reasons for the increase included redomestications and parent organisation consolidations, especially in the healthcare industry, according to Young.
Brady also said that the soft commercial market conditions primarily affected group captive and risk retention groups.
