Reinsurance and Fronting

  martin ellis-SF

Collateral for Captive Insurers

Martin Ellis, manager of Comerica Bank's Captive Insurance Group, discusses how captive insurers use two main types of collateral. A letter of credit is issued by the bank to the front for a fixed amount. A reinsurance trust is a three-party agreement among the captive, the front, and the bank.
January 08, 2018 Read More
  Light Bulb Innovation-SF

Non-NatCat Insurance-Linked Securities: Identifying Opportunities

One of the most important market trends has been the rise in non-life insurance-linked securities (ILS) that transfer risks outside of the natural catastrophe space. Aaron Koch of Milliman provides an overview of "non-Nat-Cat" ILS market potential and offers his view on next steps.
December 13, 2017 Read More

2018 Reinsurance Outlook for Captives

Reinsurance is an integral part of most captive insurers' risk management programs. Due to a confluence of events, reinsurance pricing has been fairly benign over the last several years. However, this may change in 2018. Find out why captives need to focus on reinsurance renewals.
December 06, 2017 Read More
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Harvey, Irma, and Maria's Impact on the Alternative Capital Market

Over the course of 4 weeks late in the summer of 2017, Hurricanes Harvey, Irma, and Maria brought dangerous and immensely destructive conditions to a wide swath of the Caribbean and continental United States. Aaron Koch of Milliman surveys the damage and discusses impact for the alternative capital market.
November 15, 2017 Read More
  US-EU Puzzle-SF

The Bilateral Covered Agreement: Regulating a Global Insurance Marketplace

The so-called covered agreement between the United States and the European Union is expected to level the playing field for US insurers and reinsurers operating in Europe while further confirming that the US insurance regulatory system meets the goals of insurance sector oversight, policyholder protection, and national and global financial stability.
November 13, 2017 Read More
  Arbitration Clause-SF

Reinsurance Arbitration Clause Pitfalls for Captive Insurers

Almost every captive insurer purchases some type of reinsurance. The issuing reinsurer and the captive insurer enter the relationship with the best of intentions. But if disagreements happen, they will be subject to the reinsurance contract's arbitration clause, and captive insurers should seek to understand arbitration clause pitfalls.
November 08, 2017 Read More
  Company Percentages-SF

Special Purpose Vehicles (SPVs) Defined

Most captive insurance company owners/directors have heard the terminology "special purpose vehicles" or "SPVs." However, many do not have a good working understanding of what these entities are. In this article, we provide a definition and identify several key attributes of SPVs.
October 25, 2017 Read More
  Uncertainty for Captives-SF

What Captive Insurers Need To Know about ILS, Alternative Capital, and Reinsurance

As Hurricane Irma has left its mark on Florida, and Texas continues the cleanup from Hurricane Harvey, what do these catastrophes imply for the insurance-linked securities (ILS), alternative capital, and reinsurance markets?
September 11, 2017 Read More
  Martin Eveleigh

How Single-Parent Captives Can Benefit from Captive Risk Pooling

Many single-parent captives insure only the risks of just one or a few insureds and will be unable to achieve risk sharing. One solution involves joining a risk pool. The benefits of captive risk pooling are explained in this video by Martin Eveleigh of Atlas Insurance Management.
August 14, 2017 Read More

Communication Is Key to Successful Collateral Negotiations

Collateral negotiations can often be contentious. While collateral is required for a variety of insurance programs, opinions of how much collateral is necessary can differ significantly. An objective discussion between the actuaries behind the loss projections on both sides of the negotiation can help find valuable middle ground.
July 12, 2017 Read More

What Are Insurance-Linked Securities?

Insurance-linked securities (ILS) are derivative or securities instruments linked to insurance risks. ILS value is influenced by an insured loss event underlying the security. This securitization model was born of efforts to develop an additional source of insurance and reinsurance capacity by transferring insurable risks to the capital markets. As the ILS market has developed, it has provided an alternative source of risk capital, most often for property catastrophe risks such as windstorm and earthquake.
June 12, 2017 Read More
  Think Outside the Box-SF

Reinsurance—3 Ways To Think Outside the Box

As the capital markets continue to penetrate the traditional reinsurance markets, captive owners would do well to think outside the box. This article suggests ways owners might collaborate to create innovative capital market opportunities.
March 27, 2017 Read More
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The Future of Lloyd’s: Facing Up to Fundamental Challenges

This is a market insider’s personal reflection on the future prospects for Lloyd's of London as it faces fundamental challenges around structure, regulation, and cost. Anyone with a captive using Lloyd's for reinsurance should consider the points in this narrative. While it is only one scenario, the thesis is worthy of reflection.
January 19, 2017 Read More
  Black Swan

Inherent Risks Roil Reinsurance Markets

Several recent news articles, including two we highlighted recently in "Captive Wire," got us thinking about whether captive owners are paying attention to the inherent risks currently roiling the reinsurance markets.
August 12, 2016 Read More
  Tic Tac Toe

Global Reinsurance Report Highlights Defensive Strategies

A series of 10 insightful articles on the theme of defensive strategies that are paying off for now despite competitive pressures comprise the Standard & Poor's Rating Services "Global Reinsurance Highlights 2015," published by "Intelligent Insurer."
April 12, 2016 Read More
  Medical Apparatus

Reinsurance Product Available for Systemic Risk Protection

Andrew Wheeler, director of specialty casualty for BMS Re, provides more information on a product called Systemic/Batch Protection that he discussed as part of a presentation at the recent Captive Insurance Companies Association (CICA) 2016 International Conference.
March 30, 2016 Read More
  hurricane catastrophe

Insurance-Linked Securities (ILS) Market Explained recently sat down with Aaron Koch, FCAS, MAAA, a director and consulting actuary with the Insurance-Linked Securities Group, P&C Division, at Milliman to discuss this market.
December 09, 2015 Read More
  Injured Workers

Workers Compensation Insurance Exchange Launched

Atlas Insurance Management (Atlas), a leading captive insurance management firm, recently introduced Vortex, a workers compensation risk exchange. Vortex is operated by Vortex Re, a North Carolina-licensed reinsurance company.
November 03, 2015 Read More

Treasury and IRS Issue New Proposed PFIC Regulations Aimed at Hedge Fund Reinsurers

Passive foreign investment company (PFIC) regulations proposed by the U.S. Department of the Treasury to close reinsurer PFIC loophole.
May 06, 2015 Read More
  Empty Board Room Conference Table

Reinsurance Influence on Governance

Captive and self-insurance pool boards, executives, and managers can attest to the complexity of the reinsurer relationships and the impact those relationships have on their governance and operations of their captive. A recent Connecticut Insurance Law Journal article analyzes reinsurer-public entity pool relationships through empirical research.
March 20, 2015 Read More