Successful companies don’t let the grass grow under their feet. They embrace change and use it to create competitive advantage. When it comes to your risk financing strategy, the same principle should apply. Changing conditions will mean that in order to continue delivering value your captive needs to evolve, and where a captive is no longer viable, many new risk financing alternatives exist, designed specifically for the modern marketplace.
Willis uses a number of tools to judge the efficacy of your current risk transfer strategy:
Captive Review
Willis can assess your captive’s all round performance as an integral part of your risk management strategy or concentrate on one particular area by asking key questions including: Is your captive still a cost effective risk management solution? How do rates of return, revenue generation and compliance measure up? Has the business environment and strategic direction of your organization changed since the captive was established? Have there been changes to your structure and risk exposures during the period?
Domicile Review
As we have already said, being located in the right domicile is a fundamental requirement. A Willis Domicile Review will identify whether the current location is best for the long term future of your captive. Where a move is deemed necessary, Willis can advise on the most efficient and economic way to relocate, together with a schedule of the associated costs and tasks.
Merger and Acquisition Review
Optimizing the benefits of business restructuring – mergers and acquisitions – is paramount in today’s economy. Willis specializes in advising clients on how to maximize merger cost savings and realign captive risk financing strategies with the needs of the restructured business. This includes looking at how best to integrate captive subsidiaries which have been acquired and using risk financing mechanisms to effectively segregate the liabilities of disposed entities.
Alternative Risk Financing Solutions
Where a captive’s ability to add value is severely diminished, or where a captive is unsuitable from the outset, Willis can advise on a range of innovative risk financing alternatives. These include: protected cell companies (which offer the benefits of a wholly owned captive but require less capital and management time); internal financing options such as insurer accounts and virtual captives; or traditional risk transfer solutions, sourced at excellent rates.
Exit Strategies
Should the captive have outlived its usefulness we can recommend exit options, time-lines and costs. Our advice will be underpinned by the knowledge, expertise and global resources that make Willis one of the globe’s leading captive practitioners and will give you the management information you need to make an informed decision about your current risk financing strategy.