Aneka Info

The insurance agent has been given very little exposure to and education in the world of reinsurance. Most agents are only conscious reinsurance as Underwriters insurance company the agent, they can not write, says the risk, because our insurance company treaty reinsurance agreements prevent us write this kind of business.

Reinsurers over the years of the traditional risk-taking companies been, their influence in determining underwriting philosophy for the insurers has grown significantly. Many reinsurers dictate now the primary pricing, the amount of the deductible, because a larger amount of exposure on a given insurance undertaking individual risk, today, the amount of the credit or debit card. Reinsurers have now very know more about the primary insurance business much.

The agent should consider the purchase of a reinsurance program for the agent owned captive insurance company. Many of the approaches for the purchase of reinsurance are similar, which used a traditional insurance company. The agent must be familiar with the different types of reinsurance:

1. Quota share reinsurance

2. - Excess of loss reinsurance

3. Catastrophic reinsurance

4. Aggregate you excess of loss reinsurance

5. Stop loss reinsurance

6. Finite risk reinsurance

Although the capital requirements for off agent captive insurance companies in the property, in particular in the offshore residences, are comparatively small, the structure of a comprehensive reinsurance to consider programme careful consideration. Gone are the days when stop loss reinsurance easily could that aggregate to ensure actuarial gains for the agent owned prisoners.

This in view, should the net retention of title be compared the agent owned prisoners of the financial structure and the agent owner's risk-taking philosophy. Most agent-owned captive insurance companies today are too big a new retention when contrasted with traditional insurance companies, and also taking into account their financial structure.

Whether the agent owned prisoners buys only quota share reinsurance or a combination of several types of contract used reinsurance agreements, must be that program monitors reinsurance and are consistently evaluated. The degree of difficulty increases dramatically when designing a reinsurance program for a newly formed agent owned captive insurance company.

Companies issuing backup policy
with your agent owned captive

A policy to issue arrangement in your agency whether it a retail Agency, wholesale agency or managing General Agency be - is, if a policy is issued by a licensed damage/accident company of insurance, whether approved or not approved. Then it is reinsured up to 100% of the traditional reinsurance company market, which would contain the agent owned captive insurance company. This type of arrangement is sometimes called the "on" and is almost always used if the agent has made an agent owned captive.

The policy on the issue is a "preliminary sketch fee" paid and is reinsured 100%. Some damage/accident insurance companies have their "A" with carrier as a "frontier" as their franchise model offers technical had transferred risk to financial risks. Fronting companies take into account the State premium takes, residual mods, government systems and reviews, and therefore, that the agent must be in the negotiations on a preliminary sketch fee are trained. Experience with this kind of charge shows that the pure profit margin on a preliminary sketch fee can vary from 3% to 7.5% by the upstream insurer.

For example: an agent owned captive insurance company operating in the Florida restaurant insurance market revealed the first $75,000 technical loss behind the company policy on the issue. In addition, writes of the reinsurers also owned by the same financial group, to which the policy exhibition, is the excess of loss reinsurance of $ 75,000 to $500,000, at a rate of 17.5% of the GNWPI. The excess of $500,000 to $1,000,000 border for the restaurant program has a different, as a percentage of gross net premiums. The reinsurer is a direct writing reinsurers and negotiated his excess of loss treaty reinsurance arrangement directly with the policy to issue insurance company, because she other contract has to do not with the agent owned captive insurance company agreements with each other, of which reinsurance.

To a successful agent-owned captive insurance company have, must the agent are the negotiations on the purchase of reinsurance in the reinsurance market directly or through the intermediary of the reinsurance market. The agent will also get a better understanding of why industry is there, the underwriting cycles in the property/casualty insurance and can use this technical cycles. If politics with the issue is in the insurance companies take very little technical risk, and the actual underwriting risk transfer traditional reinsurance market (such as also the agent owned captive insurance company), will start the agent, have to negotiate with reinsurers.

Using provided quota share reinsurance
Only by the agent owned captives

Here is another example: the Cayman Island agent owned captive insurance company originally started mortality horse insurance, and significantly enabled by a Bank, with the security of the Agency. The agent owned prisoners 100% of the quota share reinsurance of policy to issue insurance company could write about this significant capitalization. Policies originally written issued insurance company, 100% for the agent owned captives, which in turn an outgoing going reinsurance program, consisting of a combination of quota share reinsurance and the rest of the loss reinsurance purchased reinsured in the Agency in the directive on the issue.

The accumulation of profits in the Cayman island possessed agent captive insurance company, buy a "shell" property/casualty insurance, which went on a "A" has his niche specialty program insurance company after several offers rated was used.

Conclusion

The owner of a retail insurance agency (i.e., program administrator) must be the owner of an insurance agency wholesale, excess and surplus lines and/or the owner of a managing General Agency to explore the feasibility of the implementation of an agent owned captive insurance company. Recapture capital gains and underwriting profits is agent owner significant returns on investment.