In this article from Captive Insurance Times, Guy Carpenter's Rick Hartmann, Senior Vice President, discusses the key role prospective treaty and facultative reinsurance solutions play in helping captives manage market fluctuations and capital needs.
“Captives and risk managers should consider engaging the third-party reinsurance market to allow access to additional capital and to potentially identify more efficient risk transfer solutions," Rick said. "Prospective treaty and facultative reinsurance solutions can help captives manage volatility and protect their balance sheets.”
“Guy Carpenter’s captive segment actively places treaty reinsurance on behalf of more than two-dozen group captives, and we have executed more than 65 transactions with single-parent captives," Rick continued.
“In the face of rising commercial insurance costs, risk managers and captive owners are looking to increase the utilization of their captives to both finance and transfer risk more efficiently," Rick explained. "As a result, we have executed structured reinsurance solutions for several large and publicly-traded companies.”
Rick also mentioned how the reinsurance market offers captives a range of solutions, including employee benefits, medical stop-loss, parametric, structured risk and insurance-linked securities, which provide a blend of risk financing and risk transfer.