Tailored risk protection for captive and mutual insurance companies.
The benefits of reinsurance for captives and mutuals.
In late 2019, Artex acquired Dallas-based EWI Re, Inc. With a long history in the design, development and global placement of reinsurance programs for captives and mutual insurance companies, the addition of EWI’s team and expertise provides Artex with increased capabilities around the development of comprehensive risk management solutions for large, individual risk clients.
Additionally, EWI’s run-off and legacy solutions, as well as their safety and loss control services, complement the existing skills and expertise within Artex. When combined together, we create a formidable team dedicated to creating reinsurance programs that empower our customers to deliver their desired business outcomes.
Together, we draw from decades of experience in developing and implementing customized Reinsurance and Risk Management solutions to address each client’s evolving needs. Because businesses are dynamic, our Reinsurance team frequently reassesses each client’s changing business needs to provide you with the most efficient advice and services today as well as in the future.
Advantages of reinsurance.
Reinsurance can offer a variety of advantages to Captives and Mutual Insurance Companies, including:
- Access to reinsurance capacity leverages the capital investment.
- A mechanism for smoothing volatility, managing severity spikes, and protecting capital and surplus.
- Greater capacity options with less reliance on any one carrier.
- Syndicated reinsurance panels provide a variety of perspectives and feedback on risk to help improve underwriting results and drive optimal outcomes over time.
- Property reinsurance solutions can provide ceding commissions to a reinsured Single-Parent Captive to mitigate ongoing operating expenses.
Artex offers access to global reinsurance capacity solutions, including Layered or Quota Share Facultative (D&F) placements.
Who needs reinsurance?
Reinsurance can offer an attractive option for a variety of candidates, ranging from insurance companies and SME through to Fortune 1000 entities in a number of industries.
- Single-Parent Captives—Property or Casualty risks with a favorable loss history and a willingness to retain risk. In particular:
- P&C captives focused on U.S. or multinational industrial risks
- Captives seeking to manage their deductible exposures via buy-down protection
- Large transportation risks
- Small- to medium-sized insurance companies, such as Mutual companies and Managing General Agencies (MGAs), seeking an issuing carrier to address a reinsurance need
Types of reinsurance structures offered.
- Layered or Quota Share Facultative (D&F) reinsurance, accessed globally, for Single-Parent Captives and Risk Retention Groups (RRGs)
- Treaty reinsurance for Mutual Insurance Companies seeking a more innovative solution than what is offered under a traditional treaty reinsurance structure
- Loss Portfolio Transfer solutions to laser out specific risks from the Captive
- Issuing Carrier and Fronting Partnerships
Typical Reinsurance Structures
In terms of a general construct of a reinsurance Single Parent Captive, the following diagram outlines the general components. As the construct indicates, a Property SPC is owned by an entity and may (or may not) utilize a fronting carrier. In turn, the risks originated by the fronting carrier are reinsured by the Captive and, in turn, are retroceded to global reinsurance counterparties.
A second structure shows placement for a Fortune 1000 company. Here the syndicated layered solution attaches above business unit SIR’s ($1MM AOP with two special deductibles for Hurricane and a European plant).
Other services provided.
- Global catastrophe (CAT) modeling tailored to specific coverage areas and ZIP codes
- Legacy liability exit solutions
- Embedded risk management and loss protection resources such as fire protection and engineering risk studies, as well as outsourced risk management capabilities for complex risks
- Claim administration, reinsurance wordings and related strategies for captives