Explanation of the Corporate and Structured products that can be made available through the following structures;
Contingency policy or Rent-a-Captive
These insurance programmes allow the customer the opportunity to effectively ring-fence their own insurance risks, mainly focusing on low risk, high frequency insurance/business risks, this is done through a structured policy wording where a level of risk transfer above the self insurance appetite is maintained. A monthly experience account is provided detailing regular feedback on the status of the policy, allowing a record of all of the transactions that have gone through the programme, this includes premium throughput, claims and fee deductions and a notional investment income that accrues monthly to the policy. In the event that the risks have expired and the loss history has been minimal, the underwriting profit can be returned to the contingency policy owner or used to cover future or additional exposures, thereby reducing the need for expensive conventional insurance.
A cell captive is an insurance arrangement set up between a cell captive company and a cell owner allowing them the opportunity through a Shareholders agreement to “borrow” the insurance license, this allows the cell owner to participate in their own underwriting profits, however it also is required that the cell owner ensures that they keep their cell financially secure and no cross-subsidisation between other cell owners will occur. As mentioned with regard to the contingency policies the risks housed within a cell captive can be the cell owners own risks or insurance risks where they may want to package insurance products to their employees or customers as part of their product delivery.