The number of Marsh-managed captive insurers accessing international terrorism insurance pools has grown by 333% in the past five years.

The growth follows introduction of the Terrorism Risk Insurance Program Reauthorisation Act in the US three years ago.

US-domiciled captives are obliged to offer terrorism cover under the Act.

The number of captives insuring against cyber liability has also continued to grow, up 240% between 2012 and last year, according to Marsh’s annual report on the captive insurance market. A captive insurer is wholly owned by its insureds. They are often established when the large risk a company carries is not addressed effectively by traditional insurance.

The number of captives has continued to decline from a high of 6851 in 2015. There are now 6647 worldwide, down from 6700 in 2016, the report says.

Financial institutions continue to hold the most premium volume and the largest percentage of Marsh-managed captives – $US20.91 billion ($27.62 billion) and 24% respectively.

The communications, media and technology industry is the second-largest holder of premium volume at $US4.86 billion ($6.42 billion).

The healthcare sector has the second-largest percentage of insurers at 11.5%.

Single-parent captive insurers – owned by one company – continue to be the dominant structure, according to the report.