Fresh New Thinking on Facultative [Video]
It’s a challenging environment for insurers, so finding ways to manage volatility and protect earnings is important to our clients. For many clients, a very effective way to help them reach their goals, without losing sight of cost, is to create a framework for their facultative purchases.
The following case study illustrates how we recently helped a large, domestic multiline insurance company. It was using facultative in a passive way, accessing it for capacity or when individual sub-limits, such as machinery breakdown (boiler and machinery) were limited in their treaty. The client's first choice was to use proportional facultative.
We thought this approach was limiting and advised our client to consider facultative reinsurance in two different ways - strategic and tactical. Thinking about facultative in this new framework helped this client achieve their business goals in a cost effective way.