A new report by Marsh says that despite the economic recession and continued soft commercial insurance market, business in all parts of the world continue to use captive insurance companies as risk management mechanisms, even as the rate of new captive formations worldwide has slowed compared to preceding years.

Captives are insurance companies formed by one or more corporations, associations, or government entities as formal mechanisms for self-insuring risk. They are regulated by insurance laws in states or countries where they are located and may be used to underwrite risks beyond those of the entities that own them, subject to applicable local regulations.

In the report, Marsh examined 939 single-parent captives across the world and found that the United States and Canada continue to account for the vast majority of the world’s captive insurance companies.

Among industry sectors, financial institutions, health care, and retail are the biggest users of captives, accounting for 20 percent, 14 percent and 11 percent, respectively, of the captives in the study. Businesses of all sizes, in various parts of the world and across nearly all industries now own captives. An exception is health care, where nearly all captive owners are located in the US.