Captives remain a valuable tool to create value and build resilience

This is one of the topics covered in Commercial Risk’s latest Spotlight On Captives 2026 Report: Creating Value, Building Resilience.

Captive growth has accelerated considerably with 3.8% year-over-year increase in global captive numbers for 2025. According to data tracked by Business Insurance across 80 domiciles, the total number of active captives climbed to 6,549 in 2025, up from 6,037 in 2024 (not including microcaptives, series captives or individual cells of cell members in protected cell companies).

But even as the market turns more competitive and insurers become more accommodating, risks are not diminishing. There are persistent structural risks such as climate volatility, cyber aggregation and geopolitical fragmentation, which mean that the strategic rationale for captives is evolving rather than diminishing.

In addition, the benefits of a captive extend beyond pricing and capacity. Matt Moore, head of group captives at Zurich US, says that pricing and capacity may get clients into a captive but they are not what keeps high-quality members committed over time. “The real, defensible value of captives sits in capabilities that traditional insurance struggles to deliver consistently. Captives increasingly function as a risk-management engine rather than an expense-line item,” he says.

In addition, not all markets, regions and lines of business follow the same underwriting cycle, and markets can harden suddenly and with little warning. Having a captive in place and ready to step in when markets become difficult can make the transition to a hardening market a much smoother process.

Joshua Nyaberi, head of captive fronting, Zurich Insurance Company, says: “Captives are uniquely agile vehicles for covering risks that may be unaffordable or simply unavailable in the commercial market. By expanding the captive’s scope to cover cyber aggregates, supply chain disruption, contingent business interruption or ESG-related liabilities, the captive can transform from a simple funding mechanism into a strategic enterprise risk management tool. This cements the captive’s place as an essential component of corporate resilience.”

The Spotlight On Captives 2026 report looks at a number of areas where a captive can have an important role, from managing climate risk, where it can tailor coverage, centralize the loss data, and finance resilience and adaptation measures, to property, where captives can allow for a more tailored property program with greater flexibility to design coverage around their parent’s specific needs.

Captives are also increasingly writing cyber insurance, often filling in coverage gaps and being central to coordinating multinational cyber insurance programs. They can also help in collecting the data required to fully assess cyber exposure.

Employee benefits is another area where captives can play a critical role by centralizing claims and exposure data across countries and benefit lines, overcoming the fragmentation that characterizes fully insured local programs. And through the captive, organizations can gain greater visibility over loss drivers and total cost of risk, leading to consistent global reporting, clearer accountability and stronger alignment between HR, risk and finance functions.

The report notes that captives are increasingly used as a global coordination mechanism for employee benefits, allowing organizations to implement global minimum standards while still respecting local regulatory, fiscal and cultural requirements. Companies can achieve consistency in coverage philosophy, risk appetite and reporting, while maintaining local servicing and compliance.

One area that is seeing growing interest is affinity business, where a captive can provide tailor-made, customized coverage. The report finds that affinity insurance programs are particularly well suited to captive structures, as they typically consist of a large volume of relatively small, homogeneous risks rather than a single, high-severity exposure. Most importantly though, affinity programs support a company’s core product/service providing added value to customers and giving the company more control over the customer journey and experience.

Finally, the report considers how captives can benefit from digitalization, with operational efficiencies, greater transparency, faster reporting and more granular data to support strategic decisions, though it notes that in the captive sphere, a number of challenges may be holding the sector back and the potential is still largely untapped.

Adriana Scherzinger, group head of captives, Zurich Insurance Company, says: “A well-organized captive gives organizations greater control over risk, deeper access to data, more flexibility in program design and the ability to deploy capital with purpose. Even in a more competitive insurance market, these advantages remain highly relevant.”