CAPTIVE SOLUTIONS FOR MGAs For some MGAs, providing risk-bearing capital for their most profitable portfolios of business can be a truly transformative business decision. But making the leap from pure MGA to capital provider can be daunting. Robus has the experience and expertise to guide you through the process. A SIMPLE WAY TO PARTICIPATE The most common way for MGAs to participate in their portfolios is by providing reinsurance capacity to their insurer panel. This means establishing a reinsurance vehicle which typically agrees a quota-share reinsurance treaty with the existing the insurer or insurer panel. In this case, the insurer(s) agree to cede a fixed proportion of the premium to the MGA-owned reinsurer, which in turn agrees to fund the same proportion in claims. INSURED
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CAPACITY QUOTA SHARE REINSURANCE
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Over the past 15 years, the Robus team have facilitated many such arrangements. We have witnessed MGAs starting with small risk-bearing participations, then growing over time to writing significant parts of their portfolios, often by providing direct capacity themselves.
Managing your existing capacity providers Negotiation with existing capacity providers can be a key part of the process. Robus has the expertise and experience to assist in negotiations and early-stage development of your participation plans. Participation in risk by an MGA can sometimes appear to be a threat to the market, but in most cases it can enhance the relationship by ensuring a true alignment of interests. Here at Robus, we will ensure the most common concerns are handled appropriately. For example, existing capacity providers often cite ‘credit risk’ as a reason not to accept MGA-owned unrated reinsurance. Robus has developed a number of techniques to counter these arguments and satisfy insurer credit committees. www.robus-risk.com