New research reveals that only a small proportion of the world's National Oil Companies (NOCs) own and operate their own insurance vehicles.

The research, which was carried out by Marsh, found that only 12 percent of the world's 113 NOCs currently use captive insurance. Among the larger NOCs, captive use was higher at 33 percent.

Jonathan Groves, the report's author and Leader of Marsh's Captive Consulting Practice in Europe the Middle East and Africa, said: "With NOCs looking increasingly at expanding their operations overseas, as well as more joint ventures with international oil companies (IOCs) and other partners, the case for captive insurance use if becoming more compelling."

Captives can enhance a firm's risk management and loss management capabilities, and increase the efficiency of insurance relationships with joint venture partners. Marsh recommends that, where appropriate, NOCs set up their use of captive insurance to manage risks such as property damage and business interruption, liability, marine, aviation, construction, environmental and terrorism risks, as well as control of well.

"With a growing list of countries implementing captive legislation, more NOCs will be able to establish a captive within their own, or nearby, jurisdiction,' added Groves. "Captives insurance will only ever be one part of an NOC's risk management and mitigation strategy, but we predict it will become an increasingly important one."