Washington DC
04 August 2017
Reporter: Becky Butcher

Financial institution dominance of captive market paves way for smaller banks


Financial institutions’ continued of dominance of the captive insurance market could pave the way for smaller banks to enter the market, according to industry experts.

A recent Marsh Captive Landscape report revealed that financial institutions continued to lead the way in the captive insurance market last year with a 24 percent share.

It was also reported that they hit premium volumes of approximately $24.6 billion, and a surplus of around $40.05 billion.

As Ellen Charnley, global sales leader for Marsh’s global risk and specialties division, explained: “Financial institutions have had the greatest share of the captive market for as long as Marsh has produced the Captive Landscape Report, which is now in its tenth year.”

With the passage of the Protecting Americans from Tax Hikes Act increasing the premium limit associated with the 831(b) tax election to $2.2 million, smaller US banks have the opportunity to enter captive insurance.

Bill Mourelatos, director at Aon Captive & Insurance Management, commented: “For smaller community banks that have historically not used captives as they struggled to meet risk distribution and risk transfer hurdles, the Protecting Americans from Tax Hikes Act provides them an opportunity through risk pools to use micro captives to insure risk and obtain the advantageous tax benefits that were not previously available.”

Josh Miller, CEO of KeyState, who also sits on the Nevada Captive Insurance Association board, said he has already seen a steady increase in the use of captives by mid-size institutions.

Miller said: “As banks see their peers implementing captive insurance structures and as their primary regulators become more familiar and comfortable with the structures, I anticipate continued adoption of the structure by financial institutions.”

The full article on financial institution captives will be available to read in the next issue of Captive Insurance Times, published on 9 August.

More news
The latest news from Captive Insurance Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
UK’s ILS legislation to be in place for January renewals
17 October 2017 | London | Reporter: Jenna Lomax
Malcolm Newman, CEO of Scor’s London hub and sponsor of the London Market Group’s (LMG) ILS Taskforce is “cognisant of the time pressures if ILS applications are to be made in time for 1 January renewals”
Centaur Fund Services adds ILS head
16 October 2017 | Bermuda | Reporter: Becky Butcher
Centaur Fund Services has appointed IC Condat as its head of insurance linked-securities (ILS), based in the firm’s Bermuda office
Roundstone and HUB team up on captive programme
16 October 2017 | Ohio | Reporter: Becky Butcher
Roundstone Management and HUB International have partnered up to create self-funded medical captive programmes
Sun Life and Pareto launch stop-loss group captive
13 October 2017 | Massachusetts | Reporter: Becky Butcher
Sun Life and Pareto Captive Services have teamed up to establish a new stop-loss group captive solution, Legend Re
DARAG names new CEO of its Italian operation
13 October 2017 | Milan | Reporter: Becky Butcher
European run-off insurance company DARAG has appointed Tullio Ferrucci as CEO of DARAG Italia, following the acquisition of ERGO Assicurazioni
Cybercrime losses set to increase, says cyber risk expert
12 October 2017 | London | Reporter: Becky Butcher
Losses from cybercrime are only likely to increase because of far-reaching global connectivity, warned James Trainor, Aon’s senior vice president of cyber solutions
Axial Benefits Group complete captive deal
12 October 2017 | Massachusetts | Reporter: Becky Butcher
Axial Benefits Group has completed a medical stop-loss transaction with QBE North America to enhance its healthcare purchasing coalition operations