Marsh's Ellen Charnley: Never Experienced Captive Activity Like this

Marsh, the largest captive manager in the world, set up 76 new captives in the first 6 months of 2020, and its captive insurance leader said she expects more to come in the next 18 months.

The number of new formations is more than a 200 percent increase compared to the same period in 2019. Speaking on episode 39 of the Global Captive Podcast, Ellen Charnley, president of Marsh Captive Solutions, said the boost in captive activity is not limited to start-ups.

"I have never experienced growth or activity like this before," she said. "And people are doing more with their captives—putting more premium into the captives."

Also discussed in the interview with Ms. Charnley is the ongoing consolidation among captive managers, the impact of Marsh's 2019 acquisition of JLT on its captive practice, and the Marsh 2020 Captive Landscape Report.

"The market conditions are predominantly causing this activity, and they are causing it globally," she said. "The property market is driving activity for captives." And the D&O market is driving activity for captives, she added.

"But even in times of a soft market, we do see captive growth," she said. "They form more so in harder markets, but they form in soft markets too, and that's because the value of a captive is not just because of driving down total cost of risk. It is about writing third-party business, creating profit engines, accessing reinsurance, providing evidence of insurance, and a whole host of things that a captive can do for a parent organization."

Looking ahead to the rest of 2020 and 2021, Ms. Charnley said she only expects to see the activity around captives to continue.

"Imagine what the report will tell us next year—it will be even more significant," she said.