Structured Solutions
Structured Reinsurance Solutions (SRS) are tailor-made solutions for Corporates, Insurance and Reinsurance companies; often multi-year, where one of more risks are bundled together.
These solutions are designed to include
- Prospective (Future) Portfolios
- Retrospective (Past) Portfolios
SRS v/s Traditional Approach
SRS is a unique approach to risk financing or risk transfer and can involve combination of these techniques.
An agreement of reinsurance concepts with a profit and loss potential predictable for both sides which primarily spread the risk over time and hence have a stabilizing effect on the ceding company’s balance sheet.
While the SRS technique has been widely used for several decades in the Developed Financial World (North America, Europe & Japan) by most of the major reinsurers to provide Risk Financing and Risk Transfer at optimum costs, it is gaining considerable acceptance in the Developing Financial World in the last few years.
The very nature of these contracts permit both parties (distributor and the carrier of the risk) the full flexibility to define and agree on the terms of the contract and thereby not be limited in any way to the restrictions of the Traditional Reinsurance markets where standard wording, deductible and exclusions are used.
The growth and interest in these structured solutions is mainly due to the value created by enforcing a strong relationship between the two parties under the contract. In SRS, carrying of the risks and sharing of the losses (usually with High Profit Commissions in cases of low losses) aligns interest between both parties, which often is not exhibited in short term and selective nature of Traditional Reinsurance contracts.
Each participant gains tremendously from the contract as each sees a specific value which is typical of the Insurer/Reinsurer relationship and ultimately the most effective and efficient use of capital to provide optimum returns to both parties over the long term.
The contracts either involves a basket of risks (multi-line) or a specific type of risk which the two parties wish to participate on based on their appetite and capiral structures.
The combination of SRS with conventional methods is now common among all major top class reinsurers for a portfolio or individual risks.
Types of Structured contracts
- Event linked Bonds
- Cat Swaps
- Cat Options
- Insurance Linked Securities (ILS)
- Derivatives i.e. Weather Derivatives
- Finite Risk
- Financial Reinsurance i.e. Credit Securitization
Our Strengths :
A dedicated division for the research and development of unique customized insurance & reinsurance solutions.
Excellent track record in introducing innovative new solutions around the world.
Focus on a true contribution to our clients by understanding specific needs as opposed to just selling.
A total solution approach; that is anticipating and addressing risks that could arise from such solutions.
Key differentiation between a simple product developments versus a total solution.