
Captive owners surveyed cited a number of reasons for maintaining a captive: 60% of companies use the captive as a formal funding vehicle to insure self-assumed risk, 42% to access reinsurance markets, 41% to design and manuscript their own policy form, 35% to realize tax benefits, and 27% to centralize their global insurance program. Of the captives managed by Marsh, most are formed by financial institutions (24%), followed by health care (11.5%) and manufacturing (7.4%). Almost 80% of captives are single-parent, making it the most popular structure by a wide margin.
Recent formations have been highest among small and midsize captives—in 2017, 57% of captives were small or midsize. Large and extra-large captives are growing, however, as organizations use them to address complex risks like cyber, employee benefits, multinational pooling and medical stop loss.