The Alternative Market now represents more than 50% percent of the insurance market so it is not certain if it is Alternative anymore. This market dynamic permits re-insurers to require insured’s to assume risk for their business. Today there has been a huge commitment by re-insurers on the Captive Risk Sharing model. Program business for Managing General Agents (MGA’s) has changed forever. The Insurance Industry has become reluctant to support MGA’s unless substantial risk-sharing by the MGA is financially aligned.
The Captive Alternative makes good sense for MGA’s, Industry Association Groups, and Large Businesses. How the owners utilize the Alternative Market to accept and transfer risk, using the Captive during different market cycles, will ultimately determine the risk and reward of the Captive organized.