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Survey Report

Insurance Marketplace Realities 2026 – Captives

October 2, 2025

Global turbulence drives need for robust risk management. Captives and parametric solutions gain traction as traditional insurance markets face capacity constraints.
Cyber-Risk-Management-and-Insurance|Captive and insurance management solutions
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Key takeaway

  • Continued global turbulence is reinforcing the importance of robust risk management and risk financing strategies.
  • While insurance market rate increases have eased in property, natural catastrophe and losses from secondary perils remain high.
  • There continues to be deteriorating results in carrier casualty books driven by social inflation and third-party litigation funding.
  • Rising healthcare costs and the impact of costly specialty drugs are leading to more employers using captives to manage these risks.
  • Interest in parametric solutions, especially around climate and environmental risks, remains strong, as clients seek capacity that may not be available in traditional insurance markets.
  • The resultant overall effect remains positive for captive activity and utilization remains strong as captive owners seek to maximize the value from having a captive.
  • This is played out in terms of increased premiums going into captive, additional lines of risk, using analytics to optimize retentions and refreshed risk appetite statements.

  • Reports of new captive formations during the 1st half of 2025 remain strong, with Vermont reporting new formations as of August 2025 already exceeding the total number of new captive formations in 2024.[1]
  • Mature captives with sufficient capital and surplus continue to use that capacity to manage pricing or capacity constraints across all lines of business.
  • There seems to be renewed energy around non-U.S. employee benefit captives. Aside from the savings they may generate, they also help in creating a greater diversified portfolio of risk within your captive program.
  • Strong interest in the use of analytics to optimize how capital is deployed within a captive program.

  • The key Atlantic and Caribbean domiciles of Bermuda a nd the Cayman Islands continue to see growth in the number of new captive insurance licenses issued.
  • For the seven months to July of 2025, eight new captive licenses were issued in Bermuda and 38 insurance licenses in total. Through 2024, there were 17 new captive licenses issued in Bermuda compared to 16 in the prior full year, while the total number of new licenses issued for all types of insurers was 63.[2]
  • As usual, there have been numerous Segregated Accounts (Cells) formed during 2024 and into 2025, but statistics for these have not been published.[2]
  • During the first half of the year, Cayman issued 21 new licenses, compared to 24 licenses issued during the same period in 2024.[3] There continues to be growth in Segregated Portfolios (cells), Portfolio Insurance Companies (incorporated cells) and members in group captives, for which statistics are also not published.
  • Activity continues among insurance companies setting up internal captive reinsurers as key elements in their capital management efforts and to access reinsurance more efficiently. From a regulatory perspective, these are treated as commercial licenses rather than captives
  • Contrary to expectations, the introduction of Bermuda’s Corporate Income Tax (CIT) regime has generated some opportunities for new captive formation, although these are rather specialized in nature. We are not aware of captives leaving Bermuda because of CIT currently.
  • Outside of captive business, there remains extensive activity relating to the formation of life and annuity reinsurance entities, both in Bermuda and Cayman, for which WTW provides insurance management services.
  • Segregated account (cell) business in Bermuda remains active. The Bermuda Monetary Authority is planning to introduce some amendments to the regulation of this business, so this may have an operational impact in late 2025 and beyond.
  • International employee benefit captives are growing in importance and, aside from the savings they may generate, they also help in creating a greater diversified portfolio of risk, including premium revenue that may technically be considered as being third-party risk.

Outlook

The outlook for 2026 is for the observed trends in 2025 to continue as captives continue to be further embedded in enterprise risk management strategies. Not only to help save costs, but as a strategic enabler of resilience and risk financing innovation.

Footnotes

  1. Vermont 2025 captive formations already surpass 2024. Return to article
  2. Monthly Registration Statistics. International Insurance Company Statistics - Licencing Activity Report. Return to article
  3. International Insurance Company Statistics - Licencing Activity Report. Return to article

Disclaimer

WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).

Contacts

Peter Carter
Head of Climate Practice and Head of Captive & Insurance Management Solutions
email Email phone +44 0 203 124 6300
Jason Palmer
Regional Head of Captive and Insurance Management Solutions, North America
email Email phone +1 802 264 9555
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