Captive insurance: Perfecting governance: A guide for board directors of parent companies and partnerships

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There has been a recent surge in interest both in the UK and beyond around the formation and use of captive insurance companies. According to research by Risk Management Advisors, in 2024, there were some 8,000 captive insurance companies operating globally and writing well in excess of USD 50 billion in premiums, with around 20% of captives and associated premiums managed out of the UK and Ireland. These numbers are growing and the classes of cover written are expanding as captives are increasingly seen as effective tools for risk management and self-insurance. The choppy geopolitical and macro-economic waters which organisations are having to navigate only add to their appeal.

The aim of this publication is to provide a Guide for directors to the advantages and potential pitfalls associated with the creation and running of captive insurance companies. We examine this issue principally from the perspective of the parent company or partnership board rather than that of the captive board.