LONDON, 24 August 2005 – More domiciles have enacted captive legislation in the last five years than at any time previously, according to a new Captive Domiciles Map published today by Aon Captive Services Group. In addition, the growth in captive numbers has continued unabated, with 2004 seeing an increase of almost 6.8% over 2003 as companies increasingly turn away from the traditional insurance market and look to utilise alternative methods of risk financing.

The US has led the charge with eight states enacting captive legislation since 2000. Of the 67 domiciles worldwide, 25 of them are now based in the US. Much of this growth in the US is driven by a lack of capacity for certain risks (particularly liability related risks such as medical malpractice) and an increasing cultural preference from US companies to keep their risks onshore.

Figures from the map show that captive numbers have grown from 4,326 in 2002 to 4,975 in 2004. Premium growth has also been significant with some domiciles showing double digit growth year on year over the past three years. In 2004, Vermont saw 16% growth in premium volume, Cayman saw 13% and Hawaii recorded a 64% increase.

Protected cell captives (PCCs) have also seen strong growth. There are now 27 domiciles with some form of cell legislation, and there are currently more than 265 cell companies with around 1,200 individual cells. The vast majority of PCCs are to be found in Bermuda, the Cayman Islands, Guernsey and Vermont.

Commenting on the launch of the map, Stephen Cross, CEO for Aon Captive Services Group, said: “If conventional thinking sees the onset of a soft market as a natural plateau for captive growth, our map demonstrates otherwise. The last five years have seen a record increase in the number of countries and US states enacting captive legislation while captive numbers and premium volumes are at their highest ever levels.

“The key driver behind this growth is corporate willingness to retain more of their risks. This is partly a reaction towards the high cost or unavailability of traditional insurance (particularly on the liability side) but it is also an indication that corporates are far more comfortable with retaining their risks and exploring methods of alternative risk transfer, “ added Cross.

Copies of the map can be obtained by calling Carrie Leach:
0044 (0)207 086 0058  
carrie.leach@irmg.aon.co.uk




Notes to Editors

About Aon

Aon Corporation ( http://www.aon.com ) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. There are 47,000 employees working in Aon's 500 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

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