John Savage brings together industry experts to reflect on the key trends that defined the captive insurance landscape in 2024 and share their predictions for the challenges and opportunities ahead in 2025
Reflecting on 2024, what stands out as the most impactful development, lesson, or milestone for your business within the captive insurance industry, and how has it shaped your approach moving forward?
Scott Simmons, director, Verve Risk Services: Developing our online captive portal, Verve Aura, has been a significant achievement for us, and we look forward to continuing to roll the portal out to captive experts, enabling the online purchase of our D&O and micro-captive products during 2025.
Ian-Edward Stafrace, chief strategy officer, Atlas Insurance PCC: This year has been transformative for Atlas Insurance PCC, marked by significant milestones that have reshaped our approach and underscored the potential of innovation within the captive insurance industry.
A standout achievement was becoming the first and currently only EU-protected cell company (PCC) to secure UK branch authorisation in the post-Brexit landscape. This development reflects the importance of strategic agility in navigating regulatory complexities and evolving client needs.
We have lowered barriers to entry by letting companies and intermediaries with UK risks set up cells that can directly underwrite them without fronting arrangements. This has allowed clients to keep more of the risk and underwriting profit and made it easier for them to access the cheaper reinsurance market. This capability offers businesses new opportunities to optimise their insurance and risk finance strategies across the UK and EU.
Additionally, 2024 saw Atlas become the first EU PCC to extend its non-life (re)insurance licence to encompass life reinsurance.
Market demand and our desire to offer more flexibility in captive solutions drove this development. By licensing our first cell that reinsures products with both life and non-life benefits, we have addressed immediate client needs and paved the way for future innovations, such as employee benefits programmes that combine non-life insurance with group life reinsurance within the same cell.
The scale of our impact is evident, with over 1.5 million EU and UK policies issued in a year through our hosted cells. This growth reflects the increasing recognition of protected cell structures as a powerful solution for simplifying complex cross-border insurance needs. It also highlights the collaborative efforts of the various global captive managers we work with to drive awareness of the flexibility and value of protected cell solutions.
Marcus Schmalbach, founder and CEO, RYSKEX GmbH: 2024 marked a pivotal moment with our regulatory collaboration in Connecticut, positioning carbon credits as a novel form of regulated collateral within the captive insurance framework.
This milestone not only validated our model but also underscored the importance of aligning innovation with ESG principles. It reaffirmed our belief that integrating sustainability into insurance solutions is not just a trend — it is a necessity.
Going forward, our focus is on scaling this concept globally and expanding its application into areas like insurance-linked securities (ILS) and risk financing for large enterprises.
Michelle Bradley, consulting actuary, SIGMA Actuarial Consulting Group: One of the biggest issues we noticed throughout 2024 was the rapid evolution and expansion of many of our clients' risk profiles. A number of different (but often converging) issues contributed to this shift, including legislative changes, social inflation, shock verdicts, and emerging climate issues. These seem to have had a significant impact on companies' risk management strategies, especially in terms of the types of risks considered for captive placement.
The nature of the consulting field means that we are often reacting to client needs rather than predicting them. So, rather than focus on specific types of risks or industries, we have placed increased emphasis on our team's ability to conduct valuable research on emerging risk profiles and industry-wide changes to strengthen our overall captive analytics.
Kevin Poole, general manager, Insurance Managers Association of Cayman: 2024 was an encouraging year for the Cayman Islands captive insurance industry. While we await official statistics from the Cayman Islands Monetary Authority (CIMA), projections suggest approximately 40 new licensees, maintaining a steady pace of growth. Interest in Cayman as a leading jurisdiction remains strong across all sectors, with the reinsurance market showing exceptional expansion.
The Cayman Captive Forum, which attracted a record-breaking 1,570 attendees in December 2024, exemplified this momentum. These trends reinforce Cayman’s position and shape our plans to sustain this positive trajectory moving forward.
Dan Towle, president, Captive Insurance Companies Association: France’s creation and progress as a captive insurance domicile is the most significant development from an international perspective in 2024. Their success over the past two years and captive-friendly approach have shown just how fruitful the European market is for more captive growth.
The UK and other nations considering becoming captive domiciles have clearly taken notice. It has also created a roadmap for success that others will follow. This success will resonate throughout Europe and in other parts of our global community.
Christine Brown, director of captive insurance, Vermont Department of Financial Regulation: As a valuable risk financing tool that complements rather than competes with traditional commercial insurance programmes, the captive insurance industry continues to experience significant growth. In 2024, Vermont had another record year of growth, with a diverse group of entities forming captives to address their unique risk management needs.
Among the most creative and noteworthy structures and uses we saw this year are programmes designed to address complex social, environmental, and political issues.
It has been exciting to see the innovative financing arrangements used to fund risks that are otherwise difficult or impossible to insure in the commercial marketplace.
As organisations seek more tailored and flexible ways to manage complex risks in an evolving economic and regulatory landscape, it is important to work with professional partners who are experts at what they do. With a dedicated team of 30 highly qualified professionals who have navigated a wide range of scenarios, the Vermont Captive Insurance Division, well-positioned to lead the industry as a centre of excellence in captive insurance, will continue to ensure comprehensive, collaborative, and informed oversight of captives domiciled in our state.
Looking ahead to 2025, what key trend, opportunity, or challenge do you anticipate will most influence the captive insurance industry, and how is your business preparing to navigate it?
Sam Komo, captive manager, Missouri Department of Commerce & Insurance: The Missouri captive insurance programme experienced an ongoing trend in 2024 as the captive industry dissolved inactive companies, continued to increase coverage, and expanded the reinsurance market.
These trends are a continuation of 2023, where gross written premiums increased by 148 per cent.
While our total number of active captives will be 53 as of 1 January 2025, my projection suggests gross written premiums will again see an increase when reported in March 2025, which tells me the programme has value to the business community in our state and beyond.
If Missouri had to sum up the last two years of conversations and travel, it would be the ongoing need to support the risk community in the Midwest. That is why our focus in 2025 will move beyond the numbers as we work to develop a coalition of risk managers in and around Missouri.
This vision has led us to build a strong partnership with the Missouri Captive Insurance Association. We are collaborating to develop the Mid Rivers Risk Forum, which will take place in St. Louis from 28-30 September 2025. This event will allow attendees to expand their knowledge in their area of interest while learning new creative options in the risk industry.
Lori Gorman, deputy commissioner, Captive Insurance Companies division, North Carolina Department of Insurance: North Carolina’s captive insurance industry can expect the robust growth we experienced in 2024 to continue into 2025. The ongoing hardened market with its pricing challenges will continue to make captive solutions attractive alternatives for risk management needs in the new year.
For companies that self-insure, captive insurance structures offer the appealing benefits of tailoring coverages and gaining greater control over their risk management programme.
Coverage in the property sector stands out as particularly challenging following increased instances of catastrophic events. As a result, more business owners with favorable loss histories are considering using captives to help contain costs and gain access to the reinsurance market to manage this risk.
We expect this trend of more business owners offering property coverages to lead to more new formations in the coming year. Many existing mature captive entities will likely expand as owners continuously evaluate their coverage needs.
Rising healthcare costs are driving emerging opportunities for medical stop-loss programmes and supplemental employee benefits within captive structures, in addition to evolving risks such as AI, cyber, and terrorism coverages.
Even in the face of more regulatory pressure and increased IRS scrutiny, the captive insurance market overall is continuing to grow as a nimble, flexible alternative to the traditional market.
Interest in cell structures is expected to remain strong due to smaller to mid-size companies exploring the advantages that captive structures can provide while reducing reliance on the commercial market.
As a leading captive domicile, North Carolina is well positioned to meet the changing needs of the captive industry, and it looks forward to the challenges and opportunities in the year ahead. We have a dedicated staff of experienced in-house analysts and actuaries with a focus on excellence in customer service.
Many owners and service providers will find our philosophy of business-friendly, prudent regulation coupled with low-cost formation and operation attractive when choosing a home for their captive in 2025.
Schmalbach: 2025 will likely be defined by the rapid adoption of technology-driven solutions in the captive insurance space. Trends like tokenisation, AI-driven risk assessment, and the rise of decentralised finance are poised to revolutionise how captives operate.
The challenge will be ensuring these technologies are not only innovative but also practical and compliant with varying regulatory landscapes.
At RYSKEX, we are preparing by deepening our partnerships with forward-thinking regulators, enhancing our AI capabilities, and integrating tokenisation into our solutions to provide more transparent, efficient, and scalable risk transfer mechanisms.
Poole: With the insurance market facing challenges across various lines, captives remain at the forefront of risk management solutions for licensees, which is expected to continue into 2025 and encourage new start-ups.
Throughout 2024, Cayman actively participated in international conferences, including captive-specific and broader industryfocused events. These engagements allowed stakeholders to explore the advantages of Cayman as a domicile.
Moving forward, Cayman intends to expand its presence at these industry events in 2025, showcasing the jurisdiction’s comprehensive offerings and innovative solutions for global businesses.
Towle: Captive industry growth will remain strong through 2025 even with a softening insurance market among some lines of coverage.
Being able to keep up with the sustained growth our industry is experiencing will become a bigger challenge in 2025. The need to bring in new and younger talent and develop them quickly will become more important than ever. Focusing on employee development and investing in young professionals by utilising CICA’s Amplify Women and NEXTGen programmes will be key to success in maintaining and developing talent.
Along with this, we will also see the increasing challenge of keeping key personnel that will persist with the sustained growth we are witnessing. Expect to see people on the move, as some professionals will use this opportunity to move to higher-wage jobs at other companies.
Our industry will also continue to garner interest from private equity firms making investments in the captive insurance industry. This will provide the necessary capital for companies to pay higher-than-average wages, attracting key professionals from other companies and supporting overall growth.
Brown: Commercial lines covering business risk have traditionally used captives. There has, however, been a growing interest in using captives to cover personal lines, such as homeowners, auto, and personal umbrella policies.
The emergence of personal line coverage in captive insurance brings significant regulatory challenges to the industry. Regulators and service providers must carefully consider the concerns associated with using captives for personal lines. These concerns include consumer protection issues, the volatility of personal lines, particularly in the case of natural disasters and liability claims with runaway verdicts, which can pose solvency concerns.
Additionally, the lack of risk diversification and potential for misuse from a tax perspective must also be taken into account. Captives formed for the purpose of covering personal lines should be ready to comply with consumer protection laws and personal line regulations.
Vermont’s law prohibits captives from providing personal lines coverage due to these consumer-facing and solvency related concerns.
Although these developments do not directly impact Vermont, they give rise to a new reputational challenge for the industry as a whole.
Enoch Starnes, actuarial consultant, SIGMA Actuarial Consulting Group: Since we are an analytics company, our biggest opportunity often centres on the development of new approaches and strategies to measure the shifts we are seeing in the overall risk landscape.
A recent example of this is our continued integration of Enterprise Risk Management (ERM)-style processes to identify, quantify, and monitor risks within the captive space.
Iterative techniques such as these can help facilitate a more consistent review of retention levels and programme structures.
Adopting a more holistic approach that broadens consideration to all risks, rather than current problem risks, is something that we feel will be an important part of future risk management strategies.
