Captive insurance is experiencing growing appeal among non-traditional sources and should see a growth spurt, says a report from one of the industry’s longtime leaders.

Marsh’s 2025 Captive Benchmarking Report shows that the company helped to form 92 new captives in 2024 alone, bringing its five-year total to 500.

Captives are insurance companies set up by businesses to insure their own risks, and Bermuda remains one of the world’s top domiciles for these structures.

Gross written premiums, the amount of insurance business flowing through captives, jumped 6 per cent last year to $77 billion. Some lines of coverage saw especially dramatic increases: auto liability premiums rose 80 per cent, excess liability 24 per cent, workers’ compensation 11 per cent, and property insurance 10 per cent.

Other sources have estimated total captive insurance premiums among all providers to be more than $200 billion among 7,000 to 8,000 captives.

As traditional commercial insurance markets remain volatile, more businesses are turning to captives to take control. New captives retained more than half of the new risk they took on, while existing ones added one or two new types of coverage on average. Popular additions included cyber-insurance, directors and officers liability and supply-chain disruption.

Another trend to watch is the rise of parametric insurance — products that pay out based on specific triggers, such as wind speed during a hurricane. These are especially useful for so-called “non-damage business interruption” events, such as a storm disrupting tourism without destroying property.

“A captive owner could finance its windstorm exposure" using both primary and parametric coverage, the report read.

”By combining traditional risk transfer with a captive parametric policy, the captive owner could obtain more expansive protection and reduce coverage gaps, potentially at lower cost,” according to the report.

One area seeing strong growth is cyber-insurance. Nearly 18 per cent of large captives now include cyber-coverage, and total cyber-premiums reached $170 million. Group captives, which are designed to pool cyber-risk among multiple companies, are also becoming more common.

Meanwhile, innovative tools are making it easier to launch and manage captives. Marsh’s artificial intelligence-powered ReadyCell platform streamlines the process of setting up a captive, and its Sentrisk platform helps businesses assess supply-chain risks.

The report also highlighted that sectors such as financial services, transportation and real estate are expanding their captive use. Real estate captives, in particular, saw a 60 per cent increase in premium volume, which shows their growing appeal.