Regional insights

Europe, Middle East and Africa

In what can sometimes be a complex regulatory environment, captive growth in EMEA has not matched the same level as some domiciles in the Americas recently. But difficult market conditions are being felt across the region just as they are globally. Aon’s 2021 Captive Benchmarking Survey indicates that we’ve seen an increase in captive and protected cell formation across EMEA between 2019-20—suggesting organizations have been increasingly looking for alternative ways to finance risk, as coverage in the primary insurance market has become, in some cases, unaffordable.

Indeed we’ve seen an 80% increase in the number of insurance entities writing General/Public Liability and Credit Insurance since 2018. Property Damage/Business Interruption has also seen a steep rise in that period, with 69% of insurance entities we manage in EMEA now writing that line, compared to 42% in 2018.1

Global drivers

The trend for increasing rates and reduced capacity that started in Property lines is now in effect present in many Liability lines too - trends all interlinked with the natural catastrophes experienced in the region, and the impact of globalized behaviours in re/insurance markets where rates in general are hardening to correct years of insurer losses and underpricing.

We’ve seen particular growth in protected cell utilization for distressed supply chain-reliant sectors such as construction, waste management, paper and the food industry. Clients have sought to access capacity in the re/insurance market that they are simply no longer able to find competitively in their domestic market.

Utilization for emerging risks

As is the case in other regions, we are seeing increased interest in captive utilization for Environmental, Social and Governance (ESG) risks as companies get more familiar with their trading impact on the environment and their ability to reduce this impact. The risks associated with that have led to conversations around ‘green captives’ which, among other things, invest assets into ESG-funds to align the captive strategy with that of the parent company.

Cyber is another line that has hardened significantly over the past two years. In EMEA, this hardening has coincided with a doubling in the number of insurance entities writing Cyber and a 150% increase in Gross Written Premium since 2018.2 This is a trend that we expect to see continue as companies’ understanding of their cyber risk is improving every year. This improved understanding increases the potential for captives to be used to retain the risk in a cost-effective manner.

Overall, our data suggests that captive and protected cell owners in EMEA have benefited from the additional options available to manage their Total Cost of Risk as they have been able to make use of increased retentions or reinsurance capacity in lines hardest hit by rate hikes in recent years.


1 Aon's 2021 Captive Benchmarking Survey

2 Aon's 2021 Captive Benchmarking Survey

Vincent Barrett

Regional Managing Director, EMEA

Captive and Insurance Management


Industry insights


Find out if a captive could help your organization manage risk more efficiently. Take the two-minute questionnaire