The Alesco Risk Financing team has many years’ experience in working with large clients to achieve the optimal balance between retention in individual business units, Group retention (via a captive or central fund or retention financing plan) and the external risk transfer programme.

We do not believe the most appropriate solution for one client is the most appropriate solution for every client, and therefore we do not adopt a single “black box” approach. We will adopt a customised approach for each client to deliver a product or solution that uses a combination of quantitative modelling and takes into account the qualitative factors that need to be considered.

The decision on the optimal risk financing structure is a dynamic evaluation that needs to take into account the internal cost of capital, the most effective use of the Group risk retention capacity and the availability and cost of risk transfer in the commercial insurance market or via other products.

Our approach to analysing captive insurance company structures is described in our Captive Consultancy page. 

A Retention financing plan (RFP) can provide the following benefits

  • Up to 95% of all premiums paid  plus accrued interest, could be returned to the client – providing there are minimal or no losses
  • Irrespective of your loss record, you’ll have 3 to 5 years of continuity and stability, and budgetary certainty, since the RFP is non-cancellable by the underwriters but can be commuted by the client
  • If your expected level of attritional losses deteriorates, you’ll have time to re-engineer or restructure your programme for greater sustainability
  • You’ll find it easier to foster a more focused, disciplined risk-management culture
  • The policy can be written as a reinsurance of a captive, thereby providing ‘synthetic’ capital
  • Capital relief – a RFP can significantly reduce the capital required with a captive subsidiary particularly those operating under the EU solvency 2 regime (Dublin, Luxembourg etc.)
  • A RFP can be expanded to a full multi-line multi-year format to extend coverage to risks where traditional commercial insurance may be unavailable or prohibitively expensive

A RFP may provide a more efficient group wide structure to negotiate and reduce the cost of LOCs and other collateral commitments that restrict overall Group credit lines

Please get in touch

We welcome any enquiries about how we can help solve business problems with alternative risk transfer, so please call or email us. Our key contacts are listed below.

View our glossary of insurance terms.

Risk Financing and Captive Insurer Solutions Key Contacts