Captive use on the rise according to Marsh

Marsh has reported a jump of more than 200% in the number new captive insurance companies it formed in the first seven months of 2020, compared to the same period last year.

In its 2020 Captive Landscape Report, Marsh said that in particular, companies were writing supply chain, business interruption, and contingent business interruption risks through these vehicles.

Ellen Charnley, president of Marsh Captive Solutions, said: “Marsh formed a record 76 new captive insurance companies from January through July this year, up over 200% compared to the same period in 2019. While none of the new captives formed so far in 2020 specifically cover pandemic-related losses, organisations are using their captives to help navigate them through the global COVID-19 pandemic.”

She added: “Financial flexibility is one of the key advantages of owning captives, and since March 2020, Marsh has helped owners free $3bn from their captives using short-term liquidity tactics, such as intercompany lending, to help them respond to cash-flow challenges brought on by the pandemic.”

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