Why Captive Insurance is More Critical Than Ever
Captive ownership continues to rise. According to Aon’s 2023 Global Risk Management Survey, 25% of respondents currently use a captive, up from 17% in 2021, with an additional 6% planning to establish one in the next three years. At CIC Services, we’ve experienced this growth firsthand as clients increasingly turn to this risk management tool to manage risks in ever-complex and evolving market conditions. The past few years have underscored that the unexpected can and will happen—whether it’s a natural disaster, a supply chain disruption, or other unforeseen events that impact businesses worldwide. For example: • Natural Disasters and Power Outages: In late September 2024, Hurricane Helene, a Category 4 storm, struck the southeastern U.S., causing nearly 4 million power outages and significant damage. Such widespread impacts demonstrate the growing need for businesses to manage risks associated with extreme weather events effectively. (Campus Safety Magazine) • Supply Chain Disruptions: In 2024, global supply chains faced significant challenges, including disruptions at critical trade corridors like the Panama and Suez Canals. These disruptions highlighted the fragility of global trade and emphasized the importance of contingency planning for businesses reliant on international logistics. (The WallStreet Journal)
These incidents are difficult to predict and insure against, making captive insurance, with its ability to write broad coverage and fill gaps, a valuable tool.
When developing a robust risk management strategy, there are several reasons why business-minded audiences should know more about captive insurance: • Manufacturing Industry Outlook: Deloitte’s 2025 Manufacturing Industry Outlook highlights ongoing risks such as labor shortages and supply chain instability as leaders fend off disruption. (Deloitte) • Natural Disasters and Weather Events: Recent years have been among the costliest for natural disasters, and most scientists agree we’ll see more in the coming years. Captives can provide tailored coverage for such events, offering businesses a customized risk management solution.
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