How Facultative Reinsurance Can Help Ocean Marine Insurers


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Some cargo insurers have growing concerns about how to manage peak shipment values coming from a single contract. Now they don’t have to worry: We came up with a facultative solution that allows our clients to write the whole risk and, at the same time, manage the volatility in their book.

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How Facultative Reinsurance Can Help Ocean Marine Insurers

  1. 1. How can Facultative reinsurance help Ocean Marine insurers optimize their use of capital and write new accounts? OceanMarine case study
  2. 2. Our Ocean Marine clients often have concerns about managing peak shipment values coming from a single policy.
  3. 3. $10m $20m $15m $30m $25m $5m What if commodity prices spike mid-term? $27.5 $21.5 $24 $20 $19.5 $22 $17.5 $28 $27.5 $12.5
  4. 4. What happens when a freight forwarder switchesto fewer butlarger shipments to achieve economies of scale?
  5. 5. % Cargo insurers may set their line size based on these potential peak exposures – and settle for a smaller percentage of the account.
  6. 6. we recently worked witha client witha maximum capacity of $20 millioninterested in writing a new cargo account where some of the shipments reach $30 million in value. For example, $20m $10m
  7. 7. They didn'twant to walk away from it and lose out on potentially profitable business.
  8. 8. They considered signing down the line and premium share of the account. $
  9. 9. But this wouldn’t actually reduceor remove their exposure to volatility, only the dollar amounts involved. It would also force them to rely on their competitors to complete the placement. $15m$15m
  10. 10. We came up with a solution to allow them to maximize their upside and manage volatility.
  11. 11. We provideda $10 million excess of $20 millionlayer to cover the peak shipments via an open cover arrangement. They were able to write the whole risk usingour facultative supportto transfer the peak values. $20m $10m
  12. 12. 100% This is an example of Gen Re’s facultative solutions providing the most efficient risk transfer to our customers.
  13. 13. Sydonie Williams Contact us: Facultative is one of the many strategic tools we provide that maximize our clients' flexibilityand control. Whether you’re looking for insight on an emerging issue,underwriting expertise or perspective on a large loss or technical issue, we’re here to help. © 2014 General Re Corporation | This presentation is intended to provide background information to our clients and professional staff. It is time sensitive and may need to be revised and updated periodically. /in/sydoniewilliamsin+1 203 328 5745p sydonie.williams@genre.come t @SydonieWilliams