When the Cayman Islands passed its first Insurance Act in 1978, it laid the foundation for what would become one of the world’s most respected captive insurance domiciles. That same year, the first captives were formed to serve U.S. hospitals and healthcare systems—a sector that remains central to our success today.
Coincidentally, 1978 was also the year I was born in a small hospital in South Wales. Unlike the original St. David’s Hospital in Cardiff—now converted into apartments—many of those early healthcare captives are still thriving. And so is Cayman’s international insurance industry, which has built an extraordinary track record over nearly five decades.
Our strength lies in adaptability. Healthcare captives still account for roughly 30% of Cayman’s international insurers, but the landscape has expanded dramatically. Segregated portfolio companies, group captives, and reinsurers have all contributed to Cayman’s growth and global leadership as a captive insurance domicile.
As we reflect on 2025, this is more than a story of resilience—it’s a story of evolution. Cayman remains a leading insurance domicile today because we defend what we’ve built while embracing change. That balance will define our success for the next 50 years and beyond.
The #1 Offshore Domicile
Single-parent captive formations continued to show strength throughout 2025, reinforcing Cayman’s position as the leading offshore domicile for these structures and the global leader for group captives. What’s notable is how single-parent captives have evolved: businesses are increasingly leveraging captives to address non-traditional risks such as cyber liability, errors and omissions, and coverage gaps that standard markets often overlook. This adaptability underscores the industry’s ability to innovate and remain relevant in a rapidly changing risk environment.
Looking ahead to 2026, we expect this trend to accelerate. As organizations face heightened cyber threats, ESG-related exposures, and volatility in global insurance markets, captives will play an even more strategic role in enterprise risk management. Cayman Islands Monetary Authority’s (CIMA) captive regulations, flexibility, deep expertise, and commitment to innovation position the jurisdiction to capture this growth, ensuring it remains the domicile of choice for forward-thinking businesses.
Record Group Captive Numbers
Group captives provide an accessible entry point for businesses seeking greater control over their insurance programs. They are an ideal solution for small and medium-sized enterprises that may not have the scale to form a standalone captive but want the opportunity to transform insurance costs into a potential profit centre. The Cayman Islands has firmly established itself as the leading domicile for group captives, with multiple new formations in 2025 and an estimated 11,000 members participating across these structures—each representing a business that has chosen to invest in shared risk management.
In 2026, we anticipate continued momentum in group captive growth. Economic uncertainty, rising premiums, and emerging risks will drive more businesses to seek collaborative solutions that offer stability and cost efficiency.
The Flexibility of the SPC Model
Cayman’s Segregated Portfolio Company (SPC) legislation offers a unique and highly flexible model for captive insurance. It allows a single legal entity to establish multiple segregated cells within its framework, with each cell legally insulated from the others. This structure provides smaller businesses with a lower-cost entry point into the captive market, thanks to reduced premium thresholds and significantly lower formation costs.
Participants value the SPC model for its efficiency. Administrative costs are generally lower than those of a single-parent captive and the governance burden can be outsourced to the directors of the overall SPC structure. Adding to this is Cayman’s Portfolio Insurance Company (PIC) legislation, which enables cells to incorporate as standalone entities. This allows them to transact directly without relying solely on the SPC, and to establish their own boards of directors, offering even greater autonomy and strategic control.
In the coming year, the demand for SPC and PIC structures is expected to rise as businesses seek cost-effective, customizable solutions to manage emerging risks. Cayman’s innovative legislative framework positions it to capture this growth, particularly among mid-sized enterprises and niche industries looking for scalable captive solutions.
Reinsurance: The Flexibility of the B(iii) Insurer
Cayman’s Class B(iii) insurance license offers a unique advantage for reinsurers by allowing them to write third-party reinsurance without establishing a physical presence on the island. These structures are managed by on-island managers, keeping costs low during the initial years as the reinsurer builds surplus. This model has fueled strong growth in recent years across both property and casualty, as well as life and annuity reinsurance. In fact, over the past three years, new B(iii) formations have matched, or in some cases exceeded, the traditional B(i) captive formations for single-parent and group captives.
CIMA applies a capital adequacy regime aligned with international standards set by the International Association of Insurance Supervisors (IAIS). Higher-risk profiles require more capital, and Cayman’s risk-based approach ensures that requirements reflect the size, nature, and complexity of each reinsurer’s business. Contrary to suggestions that Cayman reinsurers operate under lighter capital rules, both CIMA and the Cayman International Reinsurance Companies Association (CIRCA) emphasize that standards are rigorous. In many cases, U.S. obligations are fully collateralized with U.S.-held assets, further strengthening confidence in the jurisdiction on Cayman Island captive insurance.
In 2026, the Cayman Islands are poised for continued growth in the reinsurance sector. Market volatility, rising demand for alternative risk transfer, and the need for efficient capital deployment will drive more reinsurers to consider Cayman Island insurance domiciles. With its strong regulatory reputation and innovative licensing framework, Cayman is well-positioned to attract new entrants and expand its footprint in global reinsurance markets.
Defend and Evolve
The Cayman insurance industry stands as a global leader because of the vision, resilience, and collaboration that built it—but leadership is never static. While we continue to defend the integrity and reputation of the industry that we’ve worked so hard to establish, we cannot afford to stand still.
Evolving with changing regulations, emerging risks, and innovative solutions is essential to maintaining our competitive edge. At GCM, we embrace this progress while safeguarding our core strengths to ensure that the Cayman Islands remain the jurisdiction of choice for all captives—today and in the future. Reach out today to learn more about owning your outcomes with captive insurance.