US Captive Insurance Growth Surges in 2024

Editor's Note: On paper, comparing the number of captives that a domicile has seems straightforward, but in practice, it's more complex. Different captive domiciles may count captives differently—some may include only active captives, while others count both active and dormant ones. Additionally, cells may be counted individually or grouped under one sponsor. Learn more about the metrics used to measure a captive domicile's success in "Captivating Metrics: What Makes a Captive Domicile Successful."

New captive insurance formations have been very major in many domiciles so far in 2024.

In Vermont, the largest US captive domicile, 26 captives were licensed through the end of May, bringing its total captive count to 690.

In addition, says Sandy Bigglestone, deputy commissioner of the Captive Insurance Division in Vermont's Department of Financial Regulation, more captives are expected to be licensed this year.

"We have many applications in review right now. Plus, we continue to have meetings with companies and organizations looking to form new captives," Ms. Bigglestone said.

In Utah, another major US captive domicile, 11 captives have been licensed so far in 2024, bringing its captive count to 422.

And more captive formations are expected. "Only time will tell for sure, but my expectation would be just under 60 new formations, similar to the last three years, with a net growth for the year of around 30 risk-bearing entities," said Travis Wegkamp, the captive insurance director of the Utah Insurance Department.

"Utah remains a great state to do business. We offer common sense regulation with an available and responsive Captive Insurance Division ready to meet your needs and assist where we can," Mr. Wegkamp added.

In North Carolina, 7 new captives have been licensed so far this year, raising its total number of captives to 318. In addition, 7 captive formation applications are pending.

And more growth is expected. "With the hard traditional market, we can expect continued growth in the captive sector," said Lori Gorman, deputy commissioner of the Captive Insurance Division at the North Carolina Department of Insurance.

In South Carolina, 7 new captives have been licensed, boosting its total count to 228.

"We fully expect to see more formations of new captives and the expansions of existing captives," said Joe McDonald, director of captives for the South Carolina Department of Insurance's Captive Insurance Division.

"South Carolina is very attractive as a domicile due to the regulatory philosophy that my team and I apply to captives and the trust and the relationship we have with the extensive network of service providers here in South Carolina and abroad," Mr. McDonald added.

In Montana, 24 new captives have been licensed so far this year, bringing its total count to 271. "We are on track to license 50 captives by the end of the year," said Erin Snyder, Montana's captive insurance supervisor. "We enthusiastically work with captive owners and managers and their companies," he added.

In the District of Columbia, 8 new captives have been licensed so far in 2024, bringing its captive count to 199. Captive regulators expect a total of 25–30 captive formations by the end of this year.

"DC is on track in 2024 of continuing its trend from recent years of consistent and steady formations of excellent captive programs, many formed by large well-known companies," said Sean O'Donnell, DC's association commissioner for risk finance.

"We attribute our success and continued growth to our robust and flexible captive law, including our unique protected cell law that accommodates the needs of captive owners, knowledgeable and experienced captive staff that understands the intricacies of regulating captive insurers, and excellent and efficient customer service to captive owners and managers, including streamlined licensing for certain captives," Mr. O'Donnell added.

In Texas, 6 new captives have been licensed so far in 2024, bringing its total captive count to 82.

"Texas recognizes that captives can be a great tool for business. The welcoming regulatory structure created by the legislature and the TDI has resulted in a big jump in the number of licensed captives," said Robert Rudnai, manager of the Texas Department of Insurance (TDI).

"We project to have at least 85 licensed captives by the end of 2024," Mr. Rudnai added.

In Michigan, 3 new captives have been licensed so far in 2024, bringing the domicile's total captive count to 27.

"With over $3 billion in premium written in 2023 in the captive market, Michigan remains posed to address the needs of business owners as they manage their risk," said David Piner, director of the Michigan Department of Insurance and Financial Services Captive Program.