Industry insights


The technology sector is facing market conditions that are generally similar to many other industries at present, with premium increases, retention increases, and limit reductions. This environment has made competitive coverage requirements more challenging to achieve leading to an increased interest in captives to respond to fill capacity. Certain sophisticated technology companies are now of a size and scale that some are in a position to ’technically underwrite’ identified corporate risks themselves, helping to reduce their reliance on conventional insurance carriers and provide certain insulation from pricing volatility. Many of these companies have strong data and analytics capabilities and are seeking ways to execute efficient trades with the market, recognizing the hedge characteristics of an insurance transaction.

Aon’s Captive Benchmarking Survey data shows a 129% increase in General Liability Gross Written Premium (GWP) in captives since 2016 with retention up by 81% since 2019. We have also seen a 386% increase in Directors’ & Officers’ (D&O) GWP since 2016 as well as a significant jump in D&O retention – up almost 2,900% compared with 2018, indicating many are struggling to secure insurance market coverage at an agreeable price and therefore are utilizing captives as an alternative.

Using captives to address emerging risks

By their nature, technology companies are often attuned to innovation and commonly look at captives as a leverageable risk finance solution earlier in the company lifecycle than we generally see in other industries - in some instances we have seen companies less than 12 months old look to set up captives. 'Lean into risk' is a mantra many technology companies live by, and traditional insurance does not always fit with their specific risk requirements or profile. Many organizations in the industry are quick to use captives to address new risks, such as when Cyber first emerged. This has allowed them to build up an early risk history, enabling them to make data-driven decisions and drive efficiencies as well as educate markets about their unique risks.

And as we shift to a more 'phygital' world—the mix of physical and digital assets— and technology companies develop new products, they are also finding increasing numbers of gaps in their insurance coverage. Captives can be used to create manuscripted policies to tailor coverage, supplementing capacity where it may be limited in the commercial market, and to demonstrate 'skin in the game' to help bridge these gaps so carriers can become more comfortable with certain emerging risks. Intellectual Property (IP) litigation, for example, is becoming a larger topic of conversation, especially as regards infringement.

Non-property Business Interruption and Supply Chain are also significant focuses for captives. These are areas where traditional risk transfer can be less effective, and a captive can add value by enabling companies to customize coverage and implement quickly. This speed and flexibility is key to addressing the risk management needs of an industry that moves at breakneck pace. As a result of market changes, coverage gaps and emerging risks, we anticipate that captives will increasingly continue to be a valuable tool for technology companies.

Industry numbers


Insurance entities under management


in Gross Written Premium (USD)

Lines of business written

Percentage of Aon-managed insurance entities writing line of business

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Property Damage/Business Interruption


Auto Insurance


Professional Liability


Type of entity

Percentages rounded to nearest whole number

Top five emerging risks

By 2022

Parent country and size by revenue

Industry insights


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