The insurance business is as old as man kind and the concept was first used in hunting groups where sharing the kill allowed the risk of starvation or injury to be minimized. Underwriting was the next major advance in risk management and got its start in the London shipping industry. It allowed more investments which expanded trade routes and led to the discovery of new resources through the use of risk syndication.
Today’s insurance landscape is vast and continuing to expand and still uses the same fundamental ideas of pricing risk using all available historical and technical resources. Insureds today are looking for new ways to manage risk by taking a greater role in the design of the policy and the looking to profit from retaining risk. Protected cell captive insurance companies are a perfect solution to launch a new product or expand capacity in restricted markets. By establishing unique underwriting cells the risk can be segregated, collateralized, and ceded all within a legally ring-fenced structure Many experts believe that half of the property and casualty insurance premium in the United States has captive insurance company involvement. Most S&P 500 companies utilized captive insurance but the use is becoming much broader with insurance agencies, associations, and smaller companies are partnering with existing captives.
Talisman Casualty Insurance Company provides all the necessary infrastructure to take advantage of the Protected Cell model. Although the process to establish captives can be challenging and similar to the licensing process of a normal commercial insurer, there are many cost saving benefits of using the captive structure. The insureds can gain direct access to International reinsurance markets and negotiate pricing based on experience of a particular small to midsize book of business or even find capacity for a new concept. Claims can be managed in an efficient manner within the cell and security can be structured where there is little to no risk retained. Each of Talisman’s unique protected cells operates as separate business units with the flexibility to make adjustments quickly to achieve the greatest underwriting success.