Captive insurers continue to be formed even during soft market conditions,
because when properly used, the captive is an effective risk management tool.
Industry statistics indicate that there are more than 5,000 captives on a
worldwide basis, and that, even during the soft market of the 1990s, the rate
of increase in active captives averaged about 5 percent annually. Accurate
numbers are hard to achieve, in part because of the different classifications
of captives. What is a captive in one domicile may be a commercial reinsurer in