By Roger C Gillett, Senior Vice-President, Johnson & Higgins (Bermuda) Ltd
CAPTIVES are formed in hard markets, right? Wrong. According to statistics, the popularity of captive insurance company vehicles is not necessarily contingent on the condition of commercial insurance markets.
All right, fewer captives are formed in soft markets, right? Wrong again! Despite a continuing soft market, 278 new insurers were registered last year in what are considered to be the world's major captive insurance domiciles.
Admittedly, not all the 278 were what could be traditionally defined as captives, but it would be safe to say that other insurers being incorporated in these domiciles were in the minority. Add to this the fact that more interest than ever before is now being shown in expanding captives' activities and it is clear that something of a sea change has taken place in the captive insurance industry.
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