pearls of wisdom and other gems… - corporate solutionscf94629c... · 2020. 10. 14. ·...
TRANSCRIPT
Pearls Of Wisdom And Other Gems…Virtual Captive Solutions
Exposure: Tropical Cyclone causing wide area damage and loss of attraction to island resort
Protection for the pure economic impact unrelated to physical damage
Your Panel of Speakers
Welcome & Introductions
Stephen Higginson Head Customer & Distribution ANZ, Swiss Re Corporate Solutions
Thomas KeistGlobal Captive Solutions Leader, Swiss Re Corporate Solutions
Insert heading/comment “A Disturbance In The Force”
A captive is the “insurance alternative” for self-financing of risk vs simple retention on the balance sheet
It is for those who:
have an expected loss significantly lower than what the commercial insurer’s premium imply
face a situation where premiums are ever increasing and capacity is becoming more limited
intend to access the wholesale reinsurance market in search for better terms and additional capacity
“A captive suits those corporates which have decided that insurance as a loss payment instrument is of value, and that self-insurance is economically the better choice”
A Captive – A Lifeboat In Troubled Seas?
Contractual elements needed to achieve this:
Multiyear: the risk financing happens over time, as is with a real Captive
Premium: premium contribution to the VC program implicitly finances a larger part of the risk over time
“Low Claims Bonus”: a “low claims bonus” to the client becomes due at the end of the period
“Additional Premium”: if losses exceed certain thresholds, an AP can become due (optional)
A Virtual Captive – Is It Real, Does It Have Substance?
“A Virtual Captive is a multiyear insurance agreement that emulates the mechanics of a traditional captive”
But are…
evaluating alternatives to setting up a captive
seeking to avoid the time needed, cost and complexities
Time Well Spent – A Virtual Captive Solution
“A Virtual Captive could suit those corporates who have decided that a captive would be the right answer to their insurance needs”
considering later exit options as well
bridging time until a captive is established
Advantages for Client:
No set-up cost and no need to navigate the regulatory complexities
A Captive But Not As You Know It - Virtual Captive Advantages
“A traditional captive is set up as a (re)insurance company within a corporation. A virtual captive is a multiyear agreement with an existing licensed insurance company. ”
No expenses for captive management services, actuarial, audit and other fees
No capital injection and no collaterals (standard situation)
Speedy implementation
Simple, clean exit options
Swiss Re Group financial strength
Things to consider:
Insurer’s Risk Appetite
Multiyear Agreements
Not necessarily reduced premium spend on single year basis
“Low Claims Bonus”: repay or re-use?
Insurance premium taxes
Minimum transaction size
Cost
The Keys To The Captive Universe
“A Virtual Captive is a consideration for those who have decided that a Captive approach to risk financing is the right thing for them”
“No mention shall be made of coral, or of pearls, for the price of wisdom is above rubies”Book of Job
Thank you!Contact us
Follow us
Stephen HigginsonHead Customer & Distribution [email protected](03) 9935 0001
Lisa MatthewsCustomer & Distribution Manager [email protected](03) 9935 0009
Thomas KeistGlobal Captive Solutions Leader [email protected]+41 43 285 87 24
Legal notice
©2017 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivative works of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re.
The information and opinions contained in the presentation are provided as at the date of the presentation and are subject to change without notice. Although the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage or loss resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial or consequential loss relating to this presentation.