AMSTERDAM–(BUSINESS WIRE)–Amid tougher renewal discussions in Europe, there has been an uptick in the use of existing captives, as owners increasingly seek optimal risk transfer solutions, according to a new AM Best report.

A new Best’s Market Segment Report, “Europe’s Captive Sector Thrives Amidst Hardening Market”, looks at the background to this development. It notes that price increases in the (re)insurance market began to appear as early as 2018 in some segments. The market has continued to harden since, with commercial insurers and reinsurers commonly reporting rate-on-rate increases, and a tightening of terms and conditions.

AM Best analysis reveals that a number of captives have increased retentions or limits on existing cover, while in some instances they have expanded into new lines of business as their parents have looked at increasing captive utilisation.

Furthermore, according to the report, European captives rated by AM Best have strong capital buffers that provide resilience against severe market shocks including the COVID-19 pandemic.

The pandemic resulted in significant financial market volatility and a global economic slowdown in 2020, generating increased claims activity and reducing the year’s earnings for a large number of insurers and reinsurers. However, the pandemic has proved to be less of an issue for most AM Best-rated European captives.

To access a complimentary copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=314508.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Mathilde Jakobsen
Director, Analytics
+31 20 308 5427
mathilde.jakobsen@ambest.com

Ghislain Le Cam, CFA, FRM
Director, Analytics
+44 20 7397 0268
ghislain.lecam@ambest.com

Richard Banks
Director, Industry Research – EMEA
+44 20 7397 0322
richard.banks@ambest.com

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
james.peavy@ambest.com