is taking place
Business Insurance data published in March noted that as of the
end of 2017 there were a total of 6,647 captives. This is a moderate
reduction from the peak of 6,836 captives in 2014. Similarly, USparented
captives also peaked in 2014 at 5,393 with a 3 percent
reduction to 5230 in 2017. Foreign-owned captives peaked in 2009
at 1,620 and have been steadily declining to where they ended the
year with 1,417 captives.
Conversely, small to medium 831(b) captives have shown significant
growth from 2009, increasing 133 percent to 2,458 offsetting the
declines in the international market. Therefore, the global captive
market is ceasing to be global in scope and is increasingly dominated
by US companies comprising 79 percent of the market with 831(b)
captives representing 37 percent of the global market.
However, the number of captives is often understated due to
segregated asset companies being reported as a single entity, even
The captives landscape in the
US has changed in recent
years, shifting from foreign
multinationals to more US-based
small to medium-sized captives.
Les Boughner of Advantage
Insurance explores the
implications of this trend.
There is a transformation taking place in the captive industry.
Historically captives were established by Fortune 500 sized
multinational corporations in offshore domiciles. Captives were
considered balanced between US and foreign multinationals insuring
their global exposures. However, over the past 10 years there has
been a noticeable decline in foreign multinationals offset by the
growth of US-based small to medium-sized captives capitalising on
the 831(b) election.
44 US Captive 20168 www.captiveinternational.com