The IIC report revealed that captive insurance accounts for around 13 percent of total insurance business in the Bahamas.
According to the report, US companies cover a large portion of clients with captives domiciled in the Bahamas. The report noted that growth was also spotted in the number of segregated captive cells, when the number increased from 65 in 2013 to 99 in 2014.
The reasons behind the attraction of the Bahamas include its well-developed financial services sector, geographical proximity to the US and Latin America, and accommodative regulation for captives.
In addition, the growth of captive insurance has spurred demand for non-life products. The IIC report noted that high-net-worth individuals are using captives to insure significant property and asset holdings, to avoid out-of-pocket expenses to third parties.
As well as a boost in captive insurance, the report said that the adoption of National Health Insurance (NHI) in the Bahamas is forecast to improve the industry growth.
The NHI plan is to implement a programme that will move the Bahamas from a system where two thirds of its citizens do not have health insurance to a system where everyone receives coverage. The government is currently in the registration stages, according to the IIC report.
Jay Patel, insurance analyst at Timetric said: “The NHI will significantly affect the business models of private insurers. While the initial stages of NHI are concentrated on primary care, it is expected to expand and cover all aspects of healthcare within the next decade and this raises questions of the role of private health insurance in The Bahamas.”