FM expands its alternative risk transfer offering for commercial property clients, bringing together captive cell solutions, parametric insurance and structured risk solutions.
The mutual property insurer says the products are designed to work alongside traditional property insurance rather than replace it, and to help clients manage the overall cost of insurance, constrained market capacity and unexpected financial losses.
According to FM, its captive cell solutions offer many of the benefits of a captive insurance programme while helping reduce the cost, complexity and administrative burden associated with establishing a standalone captive.
The cells are offered through FM’s wholly owned captives: Watch Hill Insurance Company, a sponsored captive in Vermont that FM positions as its onshore North American option, and New Providence Mutual in Bermuda.
Clients lease a protected cell and use the working capital, surplus and licences of the FM-owned captive, while FM arranges administrative, claims, engineering, reinsurance placement and admitted fronting services. FM says there is no pooling of risk between cells and that it can establish a cell for most clients within a few weeks.
The parametric option provides rapid payment where pre-agreed triggers are exceeded, complementing traditional cover. The structured risk solutions allow organisations to participate in loss outcomes in exchange for the potential return of premium, helping align insurance spend more closely with actual loss performance.
Laurel Rudnick, chief underwriting officer at FM, says: “Our clients have a wide range of risk management needs and goals. We’re building solutions that give them more flexibility, greater financial certainty and new ways to strengthen resilience over the long term.”
FM says appropriate notifications have been or will be made to regulatory authorities.
FM’s policyholder-owners include one in every four Fortune 500 companies.
