Arizona Continues To Enjoy Steady Captive Growth

Arizona is continuing to enjoy steady growth as a captive insurance company domicile.

In 2019, Arizona licensed 9 new captives, up from 8 formations in 2018, bringing its total number of captives to 128. Since 2016, the number of Arizona captives has increased every year.

"This was a positive year," said Vincent Gosz, chief captive analyst with the Arizona Department of Insurance in Phoenix.

With conditions tightening in the traditional market, Mr. Gosz expects, at a minimum, new captive formations in 2020 to match that of 2019.

"I think 2020 will be another good year and have formations to be at least comparable" to those of the prior year, Mr. Gosz said, adding that the hardening traditional market is leading captives to take on more risks as well as to increasing buyer interest in setting up new captives.

"There have been a lot of inquiries from prospective captive sponsors," Mr. Gosz said.

Arizona has numerous attractions as a captive domicile. For example, unlike many other domiciles, Arizona does not impose a tax on captives' premium volume.

In addition, captive managers and others have noted the experience and accessibility of Arizona captive regulators.

"This is a mature domicile with an experienced regulatory staff," Mr. Gosz said.