“KENSINGTON’S GROUP CAPTIVE PROGRAMMES HAVE PAID A
CUMULATIVE TOTAL OF NEARLY $2 BILLION IN DISTRIBUTIONS BACK
TO THE MEMBER INSUREDS.” ERIN BROSNIHAN, KMG
Group captives typically offer coverage for workers’ compensation,
general liability, automobile liability and automobile physical damage
insurance. There has also been an increase in the number of group
captives being used to provide medical stop-loss coverage following
the introduction of the Affordable Care Act in the US.
The Cayman Islands currently has around 120 group captives. At
the end of the second quarter of 2018, there was a total 669 class B
insurance licences—which includes 524 captives and 145 segregated
portfolio companies—along with 25 class C (special purpose insurers)
and four class D (reinsurers) licences.
There has been a large push among small and medium-sized
enterprises that may be too small to own a single-parent captive, but
want to improve their losses and better manage their risk through the
use of a group captive. Many group captives are formed by a number
of insurance buyers banding together to tackle the high prices and
restrictive coverage of the commercial insurance market.
Devin O’Brien, senior account manager at Artex Risk Solutions (Cayman),
says that in terms of joining a group captive, the four biggest benefi ts
include: premiums derived from each member company’s individual
experience; exceptional claims and loss control services; the collaboration
of industry best practices; and the return of underwriting profi t.
A snapshot of growth
Cayman Captive reached out to a number of captive managers in
the Cayman Islands about their various group captive insurance
programmes to provide a snapshot into how this sector is growing.
“We currently have 325 members across our 10 groups. Each captive
puts on between fi ve and 10 members per year, depending on the
industry they serve and the appetite for growth of the membership,”
Artex manages 11 group captives in Cayman: three in the trucking
industry covering small to medium-sized fl eet; three in construction;
one in food manufacturing; and four heterogeneous captives. The
heterogeneous captives insure a range of industries, including
manufacturing, distribution, retail, construction, non-profi t organisations,
hotels, car sales and agriculture.
In total, the captives write about $202 million in gross written premium,
and write workers’ compensation, automobile liability and auto physical
damage coverage at various retentions.
“The oldest group captive we manage was formed in 1997; the newest
were two we launched in 2016,” adds O’Brien.
Global Captive Management (GCM) currently has 15 member-owned
group captives and is expecting to license one more before the end of
“Five of the 15 captives were licensed in the last fi ve years so we
have seen signifi cant growth in this area in recent years,” says Alanna
Trundle, vice president at GCM.
For 2018, GCM has 424 members insured through its group captives,
a 12 percent increase from 2017. GWP totalled $201 million, an increase
of 8 percent year on year.
Breaking down the percentage of premium by line in these captives,
they write workers’ compensation (59 percent), general liability (22
percent) and auto liability (19 percent).
The top spot
The two largest group captive programmes in the Cayman Islands are
Raffl es Insurance and Affi nity Insurance, both managed by Kensington
Management Group (KMG) and consulting client of its sister company,
Affi nity is the world’s largest heterogeneous group captive, with 450
members and $310 million in premiums. Raffl es has close to 400
members and $295 million in premiums.
Overall, KMG together with Captive Resources accounts for 27
percent of the total group captives domiciled in Cayman, and the total
gross written premium in their captives is $2.2 billion, which represents
79 percent of group captive premium written in Cayman and 14 percent
of the entire captive market in Cayman. In addition, Captive Resources
brings other business to the jurisdiction taking its total contribution to
As of October 1, KMG and Captive Resources work together on 33
group captives in total, up from 29 in 2015. There are plans to add three
more group captives in 2019.
While new formations have been nominal, the total number of
20 cayman captive 2019