Risk financing helps organizations achieve the strategic balance of risk management—aligning the willingness and ability to take risk with business goals. Generally, the objective of financing risk is to ensure liabilities are either paid or cost-effectively financed while maintaining an adequate level of internal liquidity. Sometimes, this strategy includes planning to meet legal or regulatory requirements.

Organizations looking for a flexible risk financing option may use a captive insurer or captive – a special type of insurance company set up by a parent company, trade association, or group of companies to insure the risks of its owner or owners.  Often liability coverage for insuring certain risks with commercial carriers might not be cost effective, customizable, or even available at all. Forming a captive can provide tax benefits. Additionally, captives can provide access to the reinsurance market, using a variety of reinsurance mechanisms to provide coverage.

Guiding Principles for Triple-I Insurance Economics

Triple-I Insurance Economics and Data Analytics is the go-to-destination for data-driven insight into the relationship between economics and insurance performance. Led by our Chief Economist and Data Scientist, Dr. Michel Leonard, CBE, the practice aims to provide Triple-I members, industry stakeholders, and the general public a one-stop resource for property/casualty (P/C) data-driven insight including:

Overview

Reinsurance is insurance for insurance companies. It’s a way of transferring some of the financial risk insurance companies assume in insuring cars, homes and businesses to another insurance company, the reinsurer.

Overview

A growing number of insurers are tapping into markets in developing countries through microinsurance projects, which provide low-cost insurance to individuals generally not covered by traditional insurance or government programs.

Overview

Accounting is a system of recording, analyzing and reporting an organization’s financial status. In the United States, all corporate accounting and reporting is governed by a common set of standards, known as generally accepted accounting principles, or GAAP, established by the independent Financial Accounting Standards Board (FASB).