The growing sophistication of risk managers, increasing competition among captive domiciles and the flexible nature of the self-insurance mechanism have given buyers additional coverage options for difficult lines and extra clout with carriers at renewal time, according to industry experts.

Even in a softening commercial insurance market, captive growth has remained steady, said Nancy Gray, executive director for North America at Aon Insurance Managers in Burlington, Vt.

Even though pricing conditions are soft, she added, "we haven't seen reductions of retentions, so it's not unusual now for companies to carry $500,000 or even a $1 million deductible–they're still using their captives to be able to fund that."

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