There is substantial capacity for growth in the captive market, according to a new report from Aon.
Aon's G500 Captive Report has revealed that 36% of the Global 500 do not currently own a captive.
There is particular potential for growth in Asia, with only a quarter of G500 domiciled in the region owning captives.
Aon has concluded many insurance buyers are missing out on improved quality of cover, economies of scale and cost savings for senior management.
The Aon G500 Captive Report also highlighted that G500 companies continue to prefer offshore domiciles to onshore captives. Bermuda is preferred by 28% of the G500, followed by Vermont, Luxembourg, Ireland and Guernsey.
Stephen Cross, chief executive of Aon Captive Services Group, commented: “The research surprised us by highlighting the fact that G500 companies are missing a trick by not taking advantage of the cost and coverage benefits of captives. More surprising was the finding that companies in more developed markets, such as the US and Europe, are missing out on these benefits. One of the reasons may be the ‘perceived' cost in establishing a globally coordinated approach.
“However, we expect the G500 to bridge this gap over the next few years, particularly in Asia, where we expect to see significant growth. In addition, there is room for improvement in specific sectors such as financial services and manufacturing.”
