For Managing General Agents (‘MGAs’) introducing a portfolio of profitable business, accessing the underwriting profit of ‘their book’ can be a truly transformative business decision. Whilst making the leap to providing risk-bearing capital can seem daunting, Robus have the experience, expertise and established solutions available to guide you through the options and set-up your new vehicle.
One of the most common ways for Managing General Agents (‘MGAs’) to participate in ‘their book’ is providing reinsurance capacity to their existing or new 3rd party insurer panel.
This is achieved by establishing a reinsurance vehicle which typically agrees a quota-share reinsurance treaty with the capacity provider. Via this mechanism, the capacity provider(s) agree to cede a fixed proportion of the premium to the reinsurance vehicle, which in turn agrees to fund the same proportion in claims.
There are various options for structuring the reinsurance vehicle, and also other mechanisms for participating in the underwriting profit of your book.
Robus can manage the entire process, from cell or company set-up and licensing through to ongoing management. Our teams in Guernsey and Gibraltar/Malta have considerable experience in the formation and management of insurance companies, cells or other suitable vehicles.
For those considering bearing insurance risk for the first time, we recommend a Feasibility Study to ascertain whether this would be strategically and financially beneficial and to provide analysis of the different structures and domiciles available. For certain portfolios, establishing an insurance or reinsurance vehicle is simply not viable – we will be honest in our assessments, outlining your options along with the various costs and benefits in an unbiased way.