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Alternative Collateral

Alternative Risk and Alternative Collateral provides viable options for clients seeking collateral options and alternative underwriting structures to insure hard-to-place risks, particularly with large commercial accounts. Solutions include Cash Collateral, in which cash is posted by the client to secure its collateral obligation, and Collateral Trusts, which allows clients to provide qualified investments to secure its collateral obligation.

Features and Benefits Back To Top
  • Features

    Collateral Trust*
    Clients deposit qualified investments into an account that, by virtue of a three-party legal agreement, secures their collateral obligation.

    Cash Collateral / Funds Withheld
    As a liquid and predictable alternative, cash is posted by the client to secure its collateral obligation.

    *The Alternative Risk Division charges a minimal annual fee associated with the administration and oversight of the collateral trust account. Additional fees charged by the trustee bank or third party investment advisor may also apply.
  • Benefits

    Collateral Trusts allow clients to:
    -  Realize significant cost savings over traditional L/Cs
    -  Free-up much needed lines of credit normally tied up by an L/C
    -  Maintain ownership of the assets in the trust and the income generated
    -  Choose from an unrivaled selection of qualifying investments

    -  Collateral Trusts and Cash Collateral can be utilized to secure captive or deductible/retention
       insurance programs. Collateral Trust may also secure surety

     -  Cash Collateral/Funds Withheld accrues interest at a rate based on current market conditions.
        The interest rate is set the day the cash is received and reset annually.
 
Marketing Material Back To Top

For complex risks not effectively managed with traditional insurance products
-  Alternative Risk Highlight Sheet [pdf]