Ventiv Technology

Factors Impacting Growth According to a report by EY, the captive insurance market has grown to more than US$250bn in gross written premiums by the end of 2022, an increase of over $US100bn since 2018. The largest increase has been in the United States, but even the most mature markets, Bermuda, Luxembourg, Cayman Island and Channel Island have seen a sharp increase in activities. Table A highlights some of the factors that are driving this growth in the captive insurance market. Hardening insurance market New and emerging risks Changing business requirements D E S C R I P T I O N F A C T O R T a b l e A Data and advanced analytics A significant factor that is driving growth in the captive insurance market is the hardening of the insurance and reinsurance markets. Organizations are facing considerable premium rate increases and the inability to find coverage for complex risks or uninsurable properties in catastrophe prone regions like Florida and California. Once seen as a niche product, Cyber insurance has grown in importance over the past decade. However, as prices increase and coverage terms became less favorable, many organizations turn to captive insurers for cyber insurance. Other emerging risks that captive insurers are looking to handle are employee benefits, environmental, social and governance (ESG) programs and parametric coverage. As businesses expand into new markets and geographies, not only does this increase the demand for insurance, but they also need to be aware of new regulations and legislation such as Solvency II and GDPR for American companies operating in Europe. Captives have embraced data and advanced analytics tools to enhance their actuarial pricing mechanism and risk retention strategies THE CAPTIVE INSURANCE RENAISSANCE | 2

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