Marsh recently published its 2013 Captive Benchmarking Report, analyzing 886 captives for benchmarking analysis, representing approximately 15% of all captives globally. One key finding is that more than half of the investments made by captive insurance companies consists of loans to their parent companies, a growing trend since the economic downturn of 2008 when captives were heavily invested in equities. The motivation behind intercompany investments with the parent entity or affiliates is to minimize the cost of capital employed in the captive and enhance the parent company's liquidity. Additionally, the parent company has greater control over the captive’s invested assets.
