State of the Insurance Market

2024 Initial Outlook:

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Market Updates

As expected, 2023 proved to be another year of high demand for captive insurance. Healthcare costs, nuclear verdicts, cyberattacks, catastrophic climate events, and market-specific drivers are leading to steep commercial insurance premiums, prohibitive exclusions, and even complete lack of insurability as reinsurance decreases. For many, the solution has been to retain more risk in a captive insurance company, allowing them to choose the optimum point at which to transfer risk to third parties.

As more businesses explore the benefits of captives as an alternative risk financing solution, there has been an uptick in the use of a captive providing insurance backing to warranty programs, tenant damage and security deposit waivers, self-storage contents protection, and the like. When well run, these captives offer a revenue stream complementary to the core business. As the captive grows in size, the business has more options in the amount of risk they can retain. The most sophisticated clients are writing multiple lines of coverage through their captive to maximize the utility.

Captives remain a strong alternative to traditional insurance and we expect no material changes in the captives market.


For interested clients, they should start by becoming more knowledgeable about how captives are structured and how they can help them manage risk, no matter the size of their business. From there, they:

  • Develop a list of major causes of loss which can adversely impact revenue
  • Identify those insurance programs which are commercially available and those which are not
  • Retain risk management consultant(s) for guidance on possible ways to address these risks
  • Conduct a feasibility study to determine the expected return on investment of a captives program
  • Consider retention of risk and other techniques to develop the most cost-effective program

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The contents of this report are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.