Captives Experience Slow Down in Premium Growth

A new report issued by rating agency A.M Best Co. Inc., located in New Jersey, states that domiciled captive insurers based in the United States experienced a slowing down of premium growth for 2006, but their combined ratios significantly improved.  
 
The report indicated that net written premiums of U.S.-based domiciled captives increased just 2.7% in 2006 to $10.2 billion, which is significantly lower than the 7.3% average written premium increase over the last five years.  
 
Year-end surplus climbed to $18.8 billion at year-end 2006, up 10.3% from year-end 2005, while captives’ combined ratios improved to 94.1% at year-end 2006 compared with 102% at year-end 2005. 
 
The information is based on captive insurers in which Best was able to obtain financial statements.The report, “Domestic Captives: Improved Results, Preparing for Uncertainty,” is available at no cost for “BestWeek” subscribers at www.bestweek.com.  

Published on July 31, 2007