While in the past, risk managers perceived captives as a “niche risk management strategy, I think it's much more mainstream now,” Mr. Cormier said. “Companies that have been using them awhile have seen the benefits and are more comfortable using them in a greater capacity within their organizations.”

Meanwhile, more captive facilities are being launched within the U.S. market, rather than offshore, noted Jonathan Groves, head of captive consulting for Marsh in Europe, the Middle East and Africa.

“Locations such as Bermuda, Guernsey and Luxembourg have seen their proportion of new captives fall as a percentage of the total, while U.S. states like South Carolina have increased their share,” he noted.

“Our experience reflects two primary reasons for this,” he added. “First, captive formations tend to be in the same region as their owner and, second, with the overall increase in domiciles globally, it is becoming harder for offshore locations to differentiate themselves.”

The report found that while annual captive premium income is estimated at $55-to-$60 billion, and captives are significantly better capitalized than required by current levels of risk assumption, many are not optimizing their captive structure, creating opportunities for brokers offering innovative solutions, Mr. Cormier said.