European captive domiciles are experiencing a surge in new company formations, according to AM Best's latest analysis. In its report, entitled ‘New domiciles are changing the landscape for the European captive insurance segment’, the agency highlights France as a key driver of this growth. Recent regulatory reforms in France have made it a leading destination for captive formations in 2023 and 2024. Italy has also seen notable growth in new captive formations, adding to the trend across the region. Meanwhile, the UK and Gibraltar are considering new regulations aimed at attracting captive insurance business. AM Best’s analysis notes that Guernsey remains the largest European captive domicile, with Luxembourg and the Isle of Man securing the second and third positions, respectively. The report emphasises that European jurisdictions vary in how they report captive numbers, complicating direct comparisons. Key trends identified by AM Best include the relocation of captives from other jurisdictions to Europe and a focus on addressing parent companies' unique risk needs. Captives have demonstrated success by effectively underwriting large risks, such as cyber, property, and business interruption, with tailored coverage. Despite challenging reinsurance renewals, captives with strong underwriting discipline and favourable claims histories have continued to secure capacity, albeit at higher prices. The introduction of new regulations is expected to present both opportunities and obstacles for the European captive segment moving forward.
