The South Carolina captive insurance industry has an annual economic impact of $56.8 million, according to a study by the Moore School of Business at the University of South Carolina (USC).
The results of the study were released in 2018, focusing on the economic impact of the captive insurance industry on South Carolina—a figure which reflects the dollar value of all final goods and services produced statewide that can be attributed to the captive industry.
At year-end 2018, there were 169 active captives licensed in the state, and, according to the study, approximately $3.1 billion in premiums are written in South Carolina every year.
The study also notes that the captive industry’s annual economic impact of $56.8 million corresponds to roughly 400 jobs and over $22 million in labour income for South Carolinians that would not exist otherwise.
The economic impact is supported by the significant tax revenue generated for the state by the captive industry.
The study suggests: “Specifically, a net gain of over $1.7 million in new state tax revenue is generated each year for the South Carolina General Fund as a direct result of all ongoing business activity associated with the captive insurance industry.”
The study also states that South Carolina is the state with the second largest number of captive service providers in the US.
Additionally, it reveals that South Carolina’s captive industry has been expanding at an average annual rate of 32 percent since the state established captive legislation in 2000.
Since the introduction of the legislation, the captive industry has generated total economic impact in excess of $539 million–an impact that is associated with nearly $211 million in labour income and approximately $14 million in state tax revenue.
The study was performed under the management of Dr Joseph Von Nessen, a recognised expert in economic analyses, with the assistance of USC students.
In a statement, the South Carolina Captive Insurance Association (SCCIA) commented: “The SCCIA’s motivation was to get an external unbiased sound accounting of the economic impact of the captive industry on South Carolina.”
“Attempts had been made in the past by the association itself and by the Department of Insurance, but SCCIA leadership felt it imperative that outside experts determine what data to include and give the most accurate depiction.”
