This week marks the Vermont Captive Insurance AssociationÃ¢â‚¬â„¢s 24th Annual Conference where the economic downturn is likely to be the focus of discussions. Recent research from ratings agency A.M. Best noted that U.S. captive insurersÃ¢â‚¬â„¢ net income declined by around 66 percent in 2008 for a composite of 186 captive companies. This reflects realized losses of $1.2 billion for the year, a large percentage of which resulted from one companyÃ¢â‚¬â„¢s investment losses. On the bright side, net underwriting income actually increased over the prior year Ã¢â‚¬“ evidence of the captive industryÃ¢â‚¬â„¢s typical underwriting discipline and its inclination not to rely on investment income, according to A.M. Best. Captive formations continue amid a softening commercial insurance market, but new captive domiciles are finding it challenging to establish a presence. A.M. Best reports that the outlook for the captive industry is stable as participants exercise their financial flexibility in a softening market. Check out I.I.I. information on captive and other risk financing options.