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Published on: Allgemein

Independence through "Alternative Risk Transfer" (ART)

Alternative risk transfer is an economical opportunity for very large companies: They use the capital market to cover risks and their own financial strength. They bear a certain proportion of risks - for example, risks that are difficult to insure - of their own and benefit from greater independence from the insurance market.

It is a financially attractive opportunity for large strong businesses to explore the broad spectrum between risk transfer and risk financing for themselves: For example, transfer insurable risks to the capital markets for coverage by non-traditional risk carriers. Risk transfer to specialized legal entities for intra-group self-financing is also known as „ART.“ In addition to insurers, reinsurers and captive (re)insurance companies, risk carriers (investors) also include banks and institutional investors. You too can take an alternative risk transfer route - with an experienced and independent partner: with risk on mind®. Your advantages: You can control the insurers‘ willingness to provide cover according to your own company‘s needs and have a leverage effect yourself that should not be underestimated when it comes to setting premiums. This reduces corporate costs and strengthens your independence.


This is what an alternative risk transfer is all about
The concepts of a risk transfer or risk financing are mostly tailor-made for the respective operation and often represented in multi-dimensional types (e.g.: multi-year and/or multi- line or multiple-trigger coverages). Regardless of which type of risk transfer - CAT bonds, insurance derivatives or your own risk financing (captive or contingent capital programs) - comes into question for you: The bottom line is that you have risk management in your own hands and control it.

Key advantages of an alternative risk transfer
An alternative risk transfer supports the risk and capital management of a large operation, for example, in overcoming capacity limits or
-bottlenecks for catastrophe risks. Coverage gaps can also be strengthened or closed for new types of risks by assuming their own risk. An ART provides diversification within existing reinsurance programs, secures capacity and price levels over several years, and thus makes the company less dependent on the (re)insurance market. And let‘s not forget: An ART reduces the cost of capital and increases the company‘s liquidity.

This is what an alternative risk transfer brings you

  • Design of the basic insurance cover according to your own interests.
  • flexibility in risk engineering - you can directly influence
  • Direct influence on the cost structure.
  • Direct access to the reinsurance market.
  • greater willingness of insurers to provide cover
  • Premium structure independent from the market.

„Rent a captive“
You do not have the possibility in your company to organize an „Alternative Risk Transfer“ yourself, or you do not want to do it for some reason? Then there is the possibility to rent an ART or „captive“ from an insurance company.

Take the chance of an alternative risk transfer for your company. We will be happy to advise you and find and support the tailor-made options for your business.