A.M. Best reports slow down in U.S. captives

Domestic premiums growth is slowing while commercial market conditions show evidence of improved growth, according to a recent report from A.M. Best Co. Net written premiums in U.S. captives increased by a mere 3.6% to $9.2 billion, a slight decrease from the 4.7% premium growth in 2003, but a marked reduction from 2002 when growth reached an impressive 16.9%. In the height of the hard market, 2001, captive premiums grew 9.4%. During the 15-months ending June 30, the report indicates that 23 domestic captives received a ratings change from Best, and 17 of these were assigned a lower rating while six received a ratings upgrade.According to A.M. Best, the main cause of the ratings downgrades was adverse loss-reserve development.