CAPTIVE SOLUTIONS


Marsh is the leader in helping create innovative strategies that have significantly expanded the role of captive insurers. For almost 40 years, Marsh has helped organizations achieve their financial and strategic objectives through a complete array of captive management and advisory services.

Our Captives Expertise

What is a Captive?

A captive insurer is a legal entity formed primarily to insure the risks of one corporate parent or a number of similar corporations (e.g., trade associations) thereby contributing to a reduction in its parent’s total cost of risk.

Captives are usually domiciled in a specialized location, either offshore or onshore, and sometimes write business unrelated to their parent. Captives are formed for many reasons:
  • lack of commercial market for certain lines of coverage;
  • desire to recapture underwriting profits and investment income that would otherwise be earned by the commercial underwriter;
  • as a means to access the reinsurance market; or
  • in certain circumstances, as a means of diversifying into insurance services.
Captives are used extensively throughout the world by major corporations to cover risks situated both at home and abroad. The largest developments historically have been in the United States, the United Kingdom, and Europe, but recently, considerable interest has been evident in South America, and in the Far East, particularly from Japan and Australia. As the trade barriers throughout the world are lowered and companies become more internationally-oriented, insurance buyers are taking a more global approach to risk financing. Captives can play an integral role in the successful implementation of a global risk financing strategy.

The Benefits of Managing Your Own Risk

Captive implementation is one of the premier alternative risk finance solutions—one enjoyed by many Fortune 1000 companies and now, increasingly, by smaller companies. Once viewed primarily as a solution to counter rising premium costs, captives actually offer many potential benefits that are difficult
to match:
  • Captives are designed to enhance your ability to manage the retentions and deductibles associated with traditional risk transfer programs. By forming its own subsidiary insurer to handle much or all of its own risk—a company is freed from the control and restrictions of the commercial insurance market.
  • The flexibility to fund not only traditional coverages—such as general liability, workers compensation, auto liability, property insurance, employee benefits—but also difficult-to-insure exposures—such as environmental risks, and employment practice liabilities.
  • The ability to design your coverage as you need it, not as outlined by a commercial insurer. Your coverage can be broader, policies simpler, and risks more manageable. A captive also helps to facilitate the most effective claims-handling methods and loss-control programs.
  • Creating a self-owned insurer, such as a captive, may offer the benefits of greater control and reduced costs, both of which have a significant impact on your economic security and profitability.
  • Captives may provide significant revenue benefits. Premium payments are made directly to your captive, allowing reserves for unpaid claims and unearned premiums to be invested, offering you the ability to establish reserves from pre-tax income otherwise unavailable to a non-insurance entity. These revenues further strengthen the captive itself, eventually positioning the entity for more favorable reinsurance opportunities.
Our professionals work with you every step of the way, from the incorporation of your captive through its active day-to-day management, with a wide variety of offerings—including accounting, insurance, claims, personnel, and management information services. Marsh also holds established relationships with key service providers such as auditors, lawyers, and actuaries to help you run your captive smoothly, cost-effectively, and with the strategic and financial benefit most appropriate for your business.
Marsh Risk Management Research
2014 Captive Benchmarking Report — The Evolution of Captives: 50 Years Later
April 29, 2014  |  Views: 2070 |  Comments: 0 
2014 Captive Benchmarking Report — The Evolution of Captives: 50 Years Later
Marsh benchmarked 1,148 captives, including a vast array of captives, risk retention groups, non-traditional captive (such as special purpose vehicles), and life insurance captives...  >>
2013 Captive Benchmarking Report
May 16, 2013  |  Views: 1773 |  Comments: 0 
2013 Captive Benchmarking Report
Discovering opportunity in the shifting captive landscape   >>

Additional Thought Leadership
Integral and Mainstream Captives in 21st Century Risk Management—2012 Captive Benchmarking Report
April 16, 2012  |  Views: 2329 |  Comments: 0 
Integral and Mainstream Captives in 21st Century Risk Management—2012 Captive Benchmarking Report
The fifth annual edition of the Marsh Captive Benchmarking Report provides clients with real-time, state-of-the-art field intelligence designed to inform decision-making in optimiz...  >>
Number of Canadian-Owned Captives Expected to Increase
March 21, 2012  |  Views: 8073 |  Comments: 0 
Number of Canadian-Owned Captives Expected to Increase
In Marsh’s February Canadian Insurance Market Outlook webcast, we heard from a variety of sources of the pressures facing the insurance industry, both from a macroeconomic perspect...  >>
2011 Captive Benchmarking Report
May 02, 2011  |  Views: 3055 |  Comments: 0 
2011 Captive Benchmarking Report
Trends and Performance – 2011 Captive Benchmarking examines the financial performance and other trends of captives from 2007 to 2010, a time of unprecedented economic challenges. I...  >>
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Captive Risk
April 03, 2011  |  Views: 13406 |  Comments: 0  | Article Rating
Captive Risk
Captives are used extensively throughout the world by major corporations to cover risks situated both at home and abroad.  Read More...
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National Oil Companies Can Use Captives to Manage Enterprise-wide Insurance Needs
April 26, 2010  |  Views: 14298 |  Comments: 0  | Article Rating
National Oil Companies Can Use Captives to Manage Enterprise-wide Insurance Needs
New research reveals that only a small proportion of the world's National Oil Companies (NOCs) own and operate their own insurance vehicles.The research, which was carried out by M...  Read More...
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April 30, 2014  |  Views: 2344
Majority of US-Owned Captives Not Generating Tax Benefits: Marsh
Marsh’s annual captive benchmarking report, released today at the 2014 RIMS Conference, finds that only one-third of US captive owners treat their captives as insurance compa...  Read More...
April 23, 2013  |  Views: 3443
Onshore Captive Development Gains Momentum, But Large Scale Re-Domestication Not Occurring: Marsh
New captive owners continued to gravitate toward onshore domiciles in the US and European Union in 2012.   Read More...
April 17, 2012  |  Views: 5220
New Captive Owners More Likely to Stay Onshore: Marsh
Alternative Arrangements Growing New risks Being Assessed for Captive Use  Read More...
April 29, 2009  |  Views: 1699
Marsh Establishes Protected Cell Captive Facilities in Washington DC and Isle of Man
Marsh, the world’s leading insurance broker and risk advisor, has established protected cell captive insurance facilities in Washington, DC, and Isle of Man to serve the needs of s...  Read More...

Contacts
Trevor Mapplebeck

Toronto ON Canada
416 868 2604
trevor.mapplebeck@marsh.com