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RiverStone utilises Guernsey ICC for $305m collateralised reinsurance

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Legacy specialists RiverStone International has used a Guernsey incorporated cell to secure  multi-year excess of loss reinsurance cover to support a series of Lloyd’s transactions.

Xenon IC Limited has been established within White Rock Insurance (Guernsey) ICC Limited, owned and managed by Aon, with financing of the deal led by JP Morgan.

The deal follows that executed by Lloyd’s itself to secure five-year reinsurance cover for its Central Fund in 2021, also utilising White Rock Insurance (Guernsey) ICC Limited.

The transactions are further evidence that cell companies, and Guernsey incorporated cell structures in particular, are becoming increasingly mainstream, trusted vehicles for a variety of reinsurance deals.

Incorporated cells have also been used for huge pension longevity swap transactions, with the BT pension scheme executing a £16bn deal through a Guernsey ICC in 2014. Several similar transactions have been completed since using Guernsey incorporated cells.

“We are delighted to have completed this significant reinsurance placement which demonstrates our strong focus on maintaining a highly efficient and flexible capital structure in support of our legacy solution offerings,” said Andy Creed, RiverStone International CFO.

RiverStone said the deal “provides a fully collateralised layer of reinsurance supporting RiverStone International’s Funds at Lloyd’s, and has the ability to grow or shrink in line with the future underwriting activity of RiverStone Syndicate 3500”.

Creed added: “Aon’s engagement and creativity combined with the support and commitment from one of the world’s largest investment banks, JP Morgan is testament to RiverStone International’s leading market presence in the legacy sector

“The product supports the ongoing growth of our syndicate, strengthens security for our customers, and enables us to continue to deliver effective legacy solutions to our Lloyd’s clients.

“In conjunction with the new reinsurance, we have also extended the funding provided by other third-party capital providers, who continue to provide strong support to our growing business. Our capital management and funding position is now more resilient than ever.”

RiverStone said the deal “provides a fully collateralised layer of reinsurance supporting RiverStone International’s Funds at Lloyd’s, and has the ability to grow or shrink in line with the future underwriting activity of RiverStone Syndicate 3500”.

Holman acquires Park Wood Managers, rebrands trucking RRG

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Holman, a global automotive services organisation, has acquired commercial trucking fleet insurance provider, Park Wood Managers.

Holman’s insurance services division includes alternative risk and captive solutions and is led by former USA Risk principal Rob Bartholomew.

The family-owned business also becomes the programme manager of the Park Wood Risk Retention Group (RRG), which will be rebranded as Holman Transportation Risk Retention Group.

“This acquisition is poised to be an integral element of our long-term strategy for sustained growth and allows us to leverage Holman’s extraordinary financial stability to provide comprehensive risk mitigation solutions for fleet operators in this segment of the industry,” said Bartholomew.

“As a result of this acquisition, we’re now positioned to combine our extensive insurance and risk mitigation capabilities with Holman’s unsurpassed fleet management expertise to offer fleet operators a seamless, all-inclusive solution for protecting their vehicles, their people, and their business while also controlling their total cost of ownership.”

Holman said the acquisition enables it to provide comprehensive automotive insurance coverage and commercial risk mitigation services for the entire range of commercial fleet vehicles, regardless of fleet size, industry, or asset type.

Headquartered in New Jersey, Holman is one of the largest family-owned automotive service organizations in North America with more than 6,500 employees across North America, the UK, and Germany.

CRI adds $500m to group captive book in 2022

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Group captive experts Captive Resources added more than $500m in new premium to its portfolio in 2022, with some members now contributing up to $35m in annual premium.

There are nearly 6,000 members of the various group captives CRI consults on today, and Nick Hentges, CEO of CRI, spoke exclusively to Captive Intelligence in a wide ranging interview for GCP #79.

Hentges discussed CRI’s performance in 2022, its ambitions for further expansion into medical stop loss and why he believes group captives more than hold their own as an alternative to single parent captives in some instances.

The largest group captive the firm consults on is Affinity Insurance Ltd, first established in 1995, which has around 470 members and $407m in annual premium.

“It is really the size of some fairly sizable insurance companies,” Hentges said.

The CEO is passionate about the rationale of continuing to grow existing group captives and the advantages that scale can bring.

“In a big programme, a sizable programme, you really do have leverage in the marketplace, and that gives the members of that captive control to get consistency and predictability in what their insurance programme is going to be as they move forward,” he explained.

“It does give buying power. We negotiate from a position of strength rather than hoping that our partners are going to do well by us.”

When programmes surpass more than 200 members, CRI discusses with the captive’s board of directors what the appetite is and whether a second vehicle should be established, utilising the same broker network, to continue the growth.

CRI often refers to the strategy as a “parent-child relationship”, although there is no formal relationship between the two programmes – the established “parent” has no ownership or control over the new “child”.

“What we’ll do with the parent is raise the minimum premium, so we’re going after larger accounts now,” Hentges said.

“They may tighten the type of account that they’re looking for in that parent programme, and then we will open up the second programme.”

He highlighted how this strategy had worked successfully with Presidio Insurance, Ltd, a heterogeneous group captive, which had reached 200 members.

Fortis Insurance (Cayman), Ltd, the so-called ‘child’ of Presidio, was formed in 2016 and has since grown to 190 members itself. Presidio is now at 385 members, so it too, has continued to grow while incorporating the slightly different strategy.

“We are now starting to talk about the grandchild of Presidio, the child of Fortis, so we have a way of controlling the growth in those programmes,” Hentges added.

MSL and larger accounts

Captive Intelligence has previously reported that Captive Resources has been targeting the medical stop loss market over the past decade as businesses struggle to handle the growing cost of health insurance premiums, with self-insurance structures proving an effective strategy. In more recent years, that focus has intensified.

In November 2022 Joseph Parrilli, senior vice president at CRI, told the Global Captive Podcast that there are now more than 200 members of the medical stop loss captives the firm consults on.

“We think medical stop loss is going to be a huge area of growth,” Hentges added.

“We went from having three employees to, I think, we’re 30 or 35 employees now on the medical stop loss side. We’re going to be big in that space.”

The group captive strategy is also becoming increasingly appealing for larger companies, with Olympus Insurance Ltd. being established for members paying more than $5m in premium.

The largest individual member in the group captives that CRI supports is $35m in annual premium.

Rate and capacity challenges prompt captive consideration for renewables


  • Oil and Gas majors benefit from long established, well capitalised captives
  • New entrants struggle for affordable capacity in the commercial market
  • Captives can play vital role, but formations can be challenging for startups

Captive utilisation in the renewables market can provide companies with the ability to counter increasing rates and allow greater access to capacity, sources have told Captive Intelligence.

Rates in the commercial market for renewables have proliferated in recent years, though the market is highly fragmented, and pricing can vary substantially.

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Captive Intelligence provides high-value information, industry analysis, exclusive interviews and business intelligence tools to professionals in the captive insurance market.

MAXIS appoints Lorraine Fernandes chief legal officer

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MAXIS Global Benefits Network (MAXIS GBN), the international employee benefits joint venture between MetLife and AXA, has appointed Lorraine Fernandes as chief legal officer.

Fernandes’ new role will take effect from 1 April, subject to regulatory checks. Fernandes will sit on the MAXIS GBN Executive Committee (ExCom).

“I’m delighted to be taking on this new role and to be joining the ExCom at MAXIS,” she said.

“This is a great opportunity for me to build on the strong relationships I have with my colleagues, our network partners and our multinational clients around the world. I’m looking forward to helping MAXIS continue to go from strength to strength.”

Fernandes started her career at Ince & Co LLP in 2005, where she spent 12 years in private practice before joining MAXIS GBN in 2018 and becoming director of legal in 2019.

MAXIS works in partnership with more than 250 multinational clients to provide employee benefits risk management services and solutions.

With approximately 140 local insurance partners with specialist capabilities in more than 120 markets, MAXIS GBN’s local insurers currently cover over 3.2 million employees worldwide.

Federico Morosi, chief technical & financial officer at MAXIS GBN, said: “The Legal team, under Lorraine’s leadership, plays a significant role in the smooth running of MAXIS’ business, so it’s great to have her join our ExCom.

“I would like to thank Lorraine for all her for all her work as director of legal – I’m confident that she will be an asset to our ExCom.”

GCP #79: Nick Hentges, Erin Brosnihan and Donna Dreuth

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Nick Hentges, Captive Resources
Erin Brosnihan, Kensington Management Group
Donna Dreuth, Captive Resources

In episode 79 of the Global Captive Podcast, Richard is joined by Nick Hentges, CEO of Captive Resources, to discuss growth and trends in group captives during 2022 and what he expects 2023 to bring.

We also hear from Erin Brosnihan, President of Kensington Management Group, and Donna Dreuth, CFO at Captive Resources, who discussed with Luke at the Cayman Captive Forum how the two firms work together and their different roles and responsibilities in operating the group captive portfolio.

For more information on Captive Resources, visit their Friend of the Podcast page on our website.

Hylant Friend of the Podcast

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At Hylant Global Captive Solutions we know every business is unique, so your approach to risk management should be unique. And though finding the right solution isn’t always a clear path, we work as your partner to help navigate the world of alternative risk solutions, helping you better define, finance and manage the risks inherent in your business.

From determining if a captive is the right solution for you all the way to developing an exit strategy, we serve as your partner throughout the captive lifecycle. We promise to provide you the captive support you need to secure the optimal solution for your organization’s risk management needs. Learn more at https://www.hylant.com/globalcaptivesolutions/


KEY CONTACTS

alex gedge

Senior Captive Consultant

alex.gedge@hylant.com

anne marie towle

CEO, Global Risk & Captive Solutions anne.marie.towle@hylant.com

dawn dinardo

Managing Director of Captive Management Operations dawn.dinardo@hylant.com

Ian podmore

Director of Captive Consulting

dawn.dinardo@hylant.com


HYLANT ON THE GLOBAL CAPTIVE PODCAST

Captives provide greater flexibility to MGAs – Shawn Ram

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The captive formed by US-based cyber insurer Coalition has provided it increased flexibility and Shawn Ram, its head of insurance, told Captive Intelligence there were various reasons other managing general agents (MGA) may want to explore a similar strategy.

Coalition describes itself as the “world’s first Active Insurance provider designed to prevent digital risk before it strikes” and uses data-driven technology to provide coverage to more than 60,000 policyholders.

It announced on 14 February an expansion of its cyber insurance offering in the United States to enterprise businesses with revenues of up to $5 billion.

It also offers insurance in the UK and Canada and has relationships with global insurers, including Allianz, Lloyd’s of London, Swiss Re Corporate Solutions and Vantage.

Coalition established Palekana Insurance, Inc in Hawaii in December 2021 and Ram said it had been a valuable asset ever since.

“There are multiple reasons why captives provide value for MGAs,” he explained.

“A captive increases flexibility, as most MGAs have some degree of being beholden to carriers in respects to things like coverage limits at risk, appetite, etc. There’s also an element of control that a captive gives you.”

At the launch of Palekana, Coalition said the captive would enhance its ability to manage capacity and its long-term growth objectives while further aligning incentives with its customers.

Ram stressed that the company had not been forced into usiing captive, noting that the company had successfully secured capacity across all its programmes.

“We’re not required to use the captive, and we use the captive at our own discretion, our own risk appetite, and our own desire,” he said.

However, he did explain why a captive would be useful for those MGAs that are struggling to get capacity for certain risks.

“Capacity may be scarce in some of these areas, and so people may look captives to insure against some of these more challenging or innovative type coverages and opportunities,” he said.

Coalition chose to domicile its captive in Hawaii, and Ram highlighted that there’s a variety of issues that the company considered when picking where to domicile the captive.

“We considered things like the financials, tax implications, requirements of the domicile,” he said.

“There are nuances between onshore in the US versus offshore, and compared to an entity in Ireland, Bermuda or Cayman, and at the end of the day, Hawaii was the best fit.”

CloudCover partners Hylant for cybersecurity rent-a-captive

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CloudCover Re has established a rent-a-captive insurance programme named CloudCover CyberCell, in partnership with Hylant Global Captive Solutions.

CloudCover, which is also partnered with broker BMS Group and Munich Re on its cyber risk transfer products, said the insurance programme was needed as premiums have dramatically increased over the past decade due to significant insurance underwriting losses.

Stephen Cardot, CEO of CloudCover sad: “Unlike conventional cyber insurance offerings, the CloudCover CyberCell captive insurance programme operates as a creative answer for any large enterprise or association who is searching for an alternative approach to cyber insurance that provide lower costs while improving the coverage limits… while increasing cyber security protection for participating members.”

The partnership will allow associations, affinity groups and large enterprises to provide risk mitigation value to members in the form of more affordable cyber insurance premiums with more inclusive coverage.

Anne-Marie Towle, global captive solutions leader at Hylant, said: “The CloudCover approach involves renting a captive insurance vehicle from CloudCover Re as an alternative to conventional cyber insurance. This is where the beneficial relationship with CloudCover can begin.”

CloudCover said the improved cyber insurance coverage results from the insured employing CloudCover’s AI-generative, automated microsecond network detection security platform.

Purves Redmond hires Lauren Welch as ART practise leader

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Canadian broker Purves Redmond Limited (PRL) has appointed Lauren Welch as alternative risk transfer practice leader.

PRL is an employee-owned insurance brokerage firm, founded in Toronto in 1959. It has offices in Vancouver, Calgary, Montreal and Sudbury, and works with Canadian businesses and families.

Welch has more than fifteen years of captive and multinational experience, working both in Canada and Bermuda, most recently as the global fronting & multinational regional leader – Western Canada for AIG.

“I am very excited to be part of the PRL team,” Welch said. “I am looking forward to supporting my fellow colleagues and further building the ART practice throughout Canada, offering our clients new and innovative solutions to their complex risks.”

The company’s services include insurance brokerage, risk management advisory and employee benefits consulting.

Mark Johnstone, national risk management leader, said: “We are thrilled to have Lauren joining PRL as her expertise will reinforce our dedication to providing alternative risk management options to our domestic and multinational clients.

“Lauren will help support and develop Captive Insurance opportunities for our clients and her ability navigating the complexities of fronting insurance to optimize the cost of compliance will certainly add value to our clients.”