How can Facultative reinsurance help Ocean Marine insurers optimize their use of capital and write new accounts?

Ocean Marine

case study

Our Ocean Marine clients often have concerns about managing peak shipment values coming from a single policy.

$10m

$20m

$15m

$30m

$25m

$5m

What if commodity prices spike mid-term?

$27.5

$21.5

$24

$20 $19.5

$22

$17.5

$28 $27.5

$12.5

What happens when a freight forwarder switches

to fewer but larger shipments to achieve economies of scale?

%

Cargo insurers may set their line size based on these potential peak exposures – and settle for a smaller percentage of the account.

we recently worked with a client with a maximum capacity of $20 million interested in writing a new cargo account where some of the shipments reach $30 million in value.

For example,

$20m

$10m

They didn't want to walk away from it and lose out on potentially profitable business.

They considered signing down the line and premium share of the account.

$

But this wouldn’t actually reduce or remove their exposure to volatility, only the dollar amounts involved. It would also force them

to rely on their competitors to complete the placement.

$15m $15m

We came up with a solution to allow them to maximize their upside and manage volatility.

We provided a $10 million excess of $20 million layer to cover the peak shipments via an open cover arrangement.

They were able to write the whole risk using our facultative support to transfer the peak values.

$20m

$10m

100%

This is an example of Gen Re’s facultative solutions providing the most efficient risk transfer to our customers.

Sydonie Williams

Contact us:

Facultative is one of the many strategic tools we provide that maximize our

clients' flexibility and control.

Whether you’re looking for insight on an emerging issue, underwriting

expertise or perspective on a large loss or technical issue, we’re here to help.

© 2014 General Re Corporation | This presentation is intended to provide background information to our clients and professional staff. It is time sensitive and may need to be revised and updated periodically.

/in/sydoniewilliams in +1 203 328 5745 p sydonie.williams@genre.com e t @SydonieWilliams