Luxembourg is the leading European captive market regulated by Solvency II, closely followed by Ireland, according to Martin Winkel, an insurance analyst and editor.
More than every third active captive is being domiciled in Luxembourg, while Ireland has more than 100 licensed entities.
As of January this year, the total number of captives in the EU, and associated countries, stood at 582.
Behind Luxembourg and Ireland were Sweden, Switzerland and Malta, who each host a number of corporate insurers and reinsurers.
According to Winkel, Ireland attracts “above-average” numbers of pharmaceutical services and automotive captives, whereas Sweden is the only domicile hosting captives of public services.
Winkel also revealed that nine out of 10 Solvency II captive owners are located in the European Economic Area or Switzerland.
He said: “Although most owners prefer to remain discrete about their insurance activities, we could identify more than nine out of ten owners of active captives. This 'who is who in captives' will help companies in better understanding the dynamics of a changing market and in identifying new business opportunities.”
Many captives’ owners are currently concerned about increased costs from Solvency II and the Organisation for Economic Co-operation and Development’s project on base erosion and profit shifting, Winkel said.
He explained that smaller carriers find it increasingly difficult to operate in a cost-efficient way; therefore run-off specialists are becoming interested in this market segment.
He said: “Since the start of the millennium, at least 360 captives have gone into run-off, merged, moved, sold or dissolved in the Solvency II area—most of them in Luxembourg.”