The Vermont Department of Economic Development has released impressive figures reflecting the strong performance of its captive insurance sector throughout 2023, with this momentum carrying into the current year.
Widely acknowledged as a premier domicile for captive insurance globally, Vermont welcomed 38 new captive insurance companies in 2023, boosting the total to 659, including 632 active entities and 27 dormant ones. The positive trend continues in 2024, as Vermont has already licensed nine new captives, contributing to a historic total of 1,330 licensed captive insurance companies since the state’s inaugural one in 1981. This growth places 2023 among the top 10 years for captive formations in Vermont.
Governor Phil Scott emphasized Vermont’s sustained global leadership in the industry and its dedication to innovative, high-quality regulation tailored to the specific needs of captive insurance companies.
The diversity in the new captives is noteworthy, spanning 13 industries, with manufacturing, insurance, and real estate leading the way. The formations encompass various types, including pure (24), sponsored (6), agency (1), association (2), special purpose finance insurer (3), and risk retention groups (2). Additionally, Vermont’s 62 sponsored captive insurance companies experienced growth in new protected cells, surpassing 30 in 2023. Sponsored captives provide a structured licensed insurance vehicle for companies to manage their risks through protected cells.
Christine Brown, Captive Insurance director, highlighted the advantages of captives for companies facing challenges in obtaining insurance. Brown stated, “A captive gives its owner(s) options and allows for greater control over underwriting and claims management, ultimately resulting in better risk management practices to create positive outcomes.”
In 2023, several of Vermont’s new captives originated from international locations, including Canada, Chile, Germany, and the United Kingdom. To promote captive insurance in Latin America, a Vermont delegation, in collaboration with the Vermont Captive Insurance Association (VCIA), hosted a trade mission and educational event in Mexico City in March 2023.
VCIA president Kevin Mead stated, “We’d heard consistently that the Latin American market needed more captive insurance education. When we went to Mexico, we found that there was indeed great interest in captive insurance as a risk financing tool, and we plan to continue our efforts in the region in the year ahead.”
Launched in March 2023, the Vermont Captive Insurance Emerging Leaders (VCIEL) initiative aims to raise awareness about captive insurance careers in the region. Supported by the VCIA and the State of Vermont Economic Development Department, VCIEL comprises approximately 30 professionals, as featured in Captive International’s Special 20th Anniversary Commemorative International Center for Captive Insurance Education Report.
Kevin Gaffney, DFR commissioner, emphasized Vermont’s role as a thought leader in the industry, stating, “Raising awareness in all aspects of this industry is essential to our continued success.”
