Capability Guide
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Fronting and Captive Services
Customised, innovative risk retention solutions worldwide
Overview
AIG has global capacity to develop innovative, customised solutions to unconventional or complex risks that are either not addressed or addressed inefficiently by traditional insurance or financial markets.
A trusted partner
We partner with each client to understand its objectives, identify and analyse its risks and custom-design a programme to support its business strategy. Clients can choose from a wide range of innovative programmes that offer varying levels of risk retention and/or risk financing. In addition, we provide captive management and advisory services regarding the feasibility, formation and management of captives, and offer cell captive facilities. Our global programmes extend to all types of exposures and industries - providing solutions that deliver our expertise and capabilities.
Efficient use of capital
Protecting earnings and assets from various exposures and utilising capital efficiently are critical to the strength and growth of a company. Traditional insurance programmes may not adequately address these exposures or be the most efficient use of capital. AIG fronting programmes may provide a better solution.
Who is it for?
- Large commercial companies
- Financial Institutions
- Growing middle market companies
- Multinational corporations
Fronting may provide a better solution for companies that are:
- Evaluating the possibility of retaining risk in order to benefit from positive loss experience
- Requiring evidence of insurance for regulatory, disclosure, financing, marketing, trading, or counterparty needs
- Experiencing an above average risk profile that is not properly reflected in the market prices for traditional insurance
- Pursuing more efficient access to the reinsurance markets
- Seeking to expand the use of an existing captive, rent-a-captive, or other protected cell structure to insure all or part of a risk
- Facing a specific problem for which there is no clear or viable risk transfer solution
- Seeking greater certainty and flexibility on coverage and premium through varying market cycles
Programme Structures
Captives
An insurance or reinsurance company formed primarily to insure its owner(s) and affiliated companies.
Captive Management Services
- Rent-A-Captive (RAC)
A client "rents" a segregated cell within a sponsored captive facility.
- Captive Management and Consulting Services
We provide a complete range of services regarding the feasibility, structuring, formation, and management of captives with an in-depth understanding of each domicile’s regulatory requirements and local business practices.
Fully Funded Structures
The client funds a notional experience balance in the amount of the policy limit. This funding can take place pre-loss, post-loss or some combination. The notional experience balance is increased by interest credited and annual deposit premiums paid, and reduced by losses paid. At policy end, any residual balance would be returned.
Indemnity Programmes
A programme in which the client retains ultimate financial risk within a defined layer by agreeing to indemnify the insurer for all losses and other amounts paid in respect of that layer.
Product Details
The AIG Advantage
- Over 50 years of providing global fronting solutions leveraging AIG’s network of owned operations in over 90 countries, supported wherever required by local insurance partners
- A market leader providing non-traditional insurance and reinsurance solutions
- Technical expertise to cover risks for which there is no conventional insurance market
- Ability to analyse complex and unique risks
- A history of partnering with clients to truly understand their business needs to provide innovative risk transfer and risk financing solutions
- Superior servicing and claims handling, reporting, and management
- For additional marketing materials, white papers, and alternative risk case studies, please visit www.aig.com/frontingandcaptiveservices