premium reductions could follow
Oxygen Insurance Brokers and Close Wealth Management Group have announced the launch of a self insurance facility for UK businesses and professional practices, enabling them to reduce their insurance premiums.
The Close facility will allow the set up of individual protected cells for clients within a Guernsey-based protected cell company (PCC).
Andrew Wallin, head of Oxygen’s Financial Risks team said: “Self insurance is not a new concept but, until now, the establishment and administration costs have made it uneconomical for all but the largest companies. Our service will now allow a wider range of businesses to achieve savings whilst avoiding the onerous set up procedures and high ongoing administration costs.”
The PCC solution offers companies that have a minimum annual premium spend of £200,000 a simple low cost alternative to traditional insurance. Assuming marginal claims activity, a proportion of the premium paid to the captive is retained for the insured’s own benefit.
Commenting on the benefits of combining the PCC with traditional insurance programmes, Wallin said: “Our PCC solution works by simplifying the captive concept used by large corporations. The use of a PCC can be an extremely cost efficient method of managing risk and can complement the open market placement of insurance.”
“Combining these elements enables clients and brokers to fully manage their exposures. As the risks within a business such as employers liability, motor fleet or financial lines become better managed, the client benefits because unspent premium remains in the PCC for reuse or take out. In this way the client sees these savings more quickly than under a conventional risk transfer programme.”
Claire De Feu, Senior Product Development Manager, of CWMG said: “We have chosen Guernsey because it is a centre of excellence for PCC legislation, and we are delighted to be working with Oxygen to enable UK firms to use this pre-eminent jurisdiction for their risk transfer.”
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