Non-traditional insurance and reinsurance

Alternative risk transfer

Alternative Risk Transfer (ART) is a form of non-traditional insurance and reinsurance. International insurance solutions can be supplemented by employing alternative risk financing. Alone or in combination with other risk transfer and risk financing methods, Zurich’s ART solutions offer some unique advantages. Companies benefit from improved claims experience, while expanding their program to encompass previously uninsurable risks. Together with Zurich, they achieve greater centralization and more control over risk management.

Why Zurich?

The Alternative Risk Transfer Group maintains an inter-disciplinary team with experience in property and casualty insurance with proven experience in combining multiple lines of insurance into highly individualized programs that meet the specific, often unique needs of today’s corporate customers.

Since 1997, Zurich has executed hundreds of transactions for virtually every industry and exposure type. When working with Zurich, you will be assigned a team of experts dedicated to developing and implementing customized solutions.
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Alternative risk transfer solutions

Captives

Captive owners are increasingly considering how to diversify their captive programs’ risk portfolios, and at the same time are recognizing the need to focus on compliance. Enlist assistance to assess and understand your global risk exposures in order to tailor a captive solution for your business. Zurich has the infrastructure that can keep up with changing regulations worldwide.

As one of the industry leaders in captive services, Zurich draws on more than 25 years of experience to help you realize the benefits of your captive. Our services encompass life, non-life and consolidated captive services.

Single parent captives
In addition to traditional single-parent captive solutions, Zurich offers a vast range of solutions that give you coverage tailored specifically to your captive. Zurich’s captive services help you optimize the value of your captive, with:

  • A broad range of fronting, reinsurance, claims, risk-engineering and loss-analysis services for single-parent captives
  • Support from a global network of customer services, including coordination with Zurich’s captive/ART unit in Europe
  • Integration with Zurich’s business insurance, with emphasis on the design and implementation of international risk management programs
  • Multinational protocols that help align your captive program with local insurance regulations
  • Corporate life, pension and accident and health benefits for your workplace

Group captives
When dealing with group captives, there are more factors and risks involved. Zurich has the experience and resources to provide your group captives with innovative enterprise risk management solutions, including:

  • Specialized software to help you facilitate, continually monitor and manage risks and relevant metrics within your captive 
  • Total risk profiling to offer you a systematic approach to risk identification, prioritization and improvement for more effective risk management of your captive and its parent
  • Supply chain risk assessment and insurance to help diversify your captive portfolio by securitizing supply chain risks, increasing access to reinsurance capacity, freeing up premium allocation, providing reliable supplier data to aid in securing necessary contingent business interruption (CBI) limits, funding supply chain risk assessments with captive cash flow and increasing your understanding of supply chain exposures
  • Business continuity management to help you proactively protect your profitability when serious and unexpected interruptions occur to you or your critical suppliers
Available group captive products and programs include:

  • Structures and traditional casualty lines
  • Quota-share and stop-loss coverage
  • Concurrent and non-concurrent policy-attaching agreements

Other captive products

Depending on the makeup of your risk profile, a holistic solution may better protect your company than a single-parent or group captive. Zurich assesses and serves various types of captives through the use of independently owned segregated portfolio companies (SPC).

With the SPC option, we help our customers mitigate the cost of forming and maintaining a captive facility. The segregated portfolio company creates individual captive "cells" that are separate from each other but linked to the captive, segregating the assets and liabilities of each cell and protecting participants against another cell's insolvency or bad loss experience.

The SPC option is right for homogeneous and heterogeneous captives, including:

  • Multiple-member
  • Single-member
  • Agency
  • Program administrator
  • Association

Integrated solutions (multi-year/multi-line)

Zurich's Alternative Risk Transfer Group specializes in global integrated risk programs on a multi-year, multi-line basis. The benefits of integrated risk programs may include an optimized risk portfolio, lower administrative costs and greater contract certainty.

While each integrated program is customized to the needs of the client, there are certain characteristics common to most:

  • A single aggregate limit — Rather than requiring the insured to buy separate coverage limits on a transactional basis, an integrated program can be structured with a single aggregate limit that applies to a company’s portfolio of risks.
  • A multiple year term — Integrated programs typically extend over a three-year term, which provides the insured the benefit of a stable rate regardless of market conditions or loss experience.
  • Management of a multitude of risks — Integrated programs typically encompass at least three lines of coverage.
  • Basket aggregate protection — Retained loss volatility can be managed by controlling the total amount of retained loss the insured could face in a given period of time.
  • Management of risk where traditional market solutions are inefficient or unavailable — An integrated program offers a platform for combining elements of risk transfer and risk financing.

Corporate risk insurance sharing system

The Corporate Risk Insurance Sharing System (CRISS) solution is an alternative risk financing instrument that allows customers to carry a certain part of its own risks while building up loss reserves through Zurich Insurance Company Ltd (Canadian Branch). The client ‘uses’ the balance sheet of the insurer while the insurer keeps an individual profit and loss account for the client. By establishing this CRISS agreement account, the insured can participate in taking risks with respect to the underlying policies. The profit-sharing component enables the insured to benefit from the favourable development of the risk(s). In case the individual profit and loss account turns negative (because of unfavourable loss development), the owner of the CRISS account is obliged to balance the account.

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Knowledge Hub: Alternative risk transfer

Head of Alternative Risk Transfer, Zurich Canada

As Head of Alternative Risk Transfer, Bialy leads a team of underwriters in the... About this expert