As commercial property insurance rates moderate, the value and relevance of captive insurance companies isn’t expected to fade away.
A panel of experts discussed the state and evolution of the captive sphere during a presentation at the RIMS RiskWorld conference May 4-7 in Chicago. Those experts seemed to agree: While hard markets often act as a catalyst, the decision to form or expand a captive is not just a short-term reaction.
“The long-term rationale is much more strategic,” said Adriana Scherzinger, moderator of the panel and group head of captives for Zurich Insurance.
Marsh defines captive insurance as a risk financing mechanism in which a company insures itself against future losses. Essentially, an insured brings its risk in-house by creating a licensed company that provides insurance to its parent organization or affiliates.
Slides shown during the presentation showed that 195 new captives were launched in North America in 2024. That brought the total count to 2,687 at the end of the year. And while 36% of the continent’s captives are older than a decade, nearly a quarter of them are less than three years old, according to numbers from Captive Intelligence Data Hub.
“Captives are really, really, really alive and well,” said Michael Serricchio, managing director and America’s consulting leader for Marsh Captive Solutions. Marsh alone has formed more than 600 captives in the last five years–92 of which formed in 2024.
Serricchio said the record growth in captives in the last few years can be attributed to the hard property insurance market, natural catastrophes, global uncertainty, and political unrest. These issues present an opportunity for clients to understand how they can take control of their own risk, save premium dollars, and create governance, he added.
But how could captives be affected by improving rates? Marsh data shows that global commercial insurance rates fell 3% on average in the first quarter of 2025, marking the third consecutive quarterly decrease after seven years of rising rates. Property rates declined 6% globally in Q1 and 9% in the U.S.
