Alternative
Risk
Management
Solutions

FOR BUSINESS LEADERS

INSURING
HIDDEN RISK

Most business owners unknowingly self insure a large amount of risk. Many of these are hidden or “below the surface” risks inherent in the operation of a business.

Any material risks can be insured.

If insurance claims are as projected, the reinsurance company may retain profits that can be distributed to its owners.

Insured - Self-Insured Risk Image FINAL 1

FORWARD

For many years, large corporations have used alternative risk transfer strategies to augment commercial P&C policies, reduce insurance costs, mitigate claims and improve risk management. With the changing dynamics among traditional property and casualty insurance companies, these benefits are even more important to middle market companies, as well as groups and associations.

A Reinsurance Company platform is the premier risk management and risk financing tool. For forward-thinking companies, managing and financing risks (as well as protecting assets) have become important aspects of overall business strategy.

We invite you to review this website and contact us to discuss how your organization can obtain the benefits of a Reinsurance Company and other alternative risk transfer vehicles.

Reinsurance Company Benefits

■ Asset Protection

As with other insurance company structures, properly-formed Reinsurance Company have many asset protection benefits.

 
 

■ Taxation

Insurance companies follow special rules with respect to taxes. Statutory tax benefits are available to all insurance companies, including Reinsurance Company's. Tax benefits alone, however, should not be the reason behind establishing a captive insurance company.

 
 
 
 

■ Cost Reductions / Capture Underwriting Profit

Typically, 35% - 50% of the premium paid to a commercial insurer goes to overhead and profit.

 
 
 
 

■ Risk Management

Conventional insurance typically provides little incentive to improve risk management, as there is no participation in the profitability of the insurance program. However, with a Reinsurance Company, the business will benefit from good claims practices and experiences. A Reinsurance Company provides strong incentives to improve risk management throughout an organization.

 
 

■ Unavailability of Coverage

Reinsurance Companys make sense when and where the commercial market is unable to provide coverage for certain risks (including warranty, reputation, regulatory, product liability, business interuption risks), or where the price quoted is unreasonable (such as medical malpractice or construction defect).

 
 
 
 

■ Cash Flow Benefits / Investment Income

Apart from pure underwriting profit, Reinsurance Company's earn investment income on the premiums received. Premiums are typically paid in advance while claims are paid out over time. The Reinsurance Company retains control over the premiums and surplus.

 
 

■ Underwriting Stability

A Reinsurance Company is less vulnerable to the cyclical nature of hard and soft markets that affect the conventional insurance market. Thus, a Reinsurance Company can aid a business that requires accurate financial projections.

 
 

A REINSURANCE COMPANY CAN LOWER THE COST OF
TRADITIONAL P&C INSURANCE

Once a Reinsurance Company  has been established, the business owner (insured) can self-insure their uninsured and under-insured risks. it is common for the insured business to adjust premium and deductibility with their commercial P&C.

Call one of our representatives to explain a use case where one of our clients saved more than $900,000 in this real market scenario.

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