A new group insurance facility developed by Commercial Union, J&H Marsh & McLennan and Kleinwort Benson gives mid-sized businesses in the UK an affordable risk-funding alternative to traditional insurance.
Portway Insurance PCC Limited gives participants the advantages of captive ownership without the otherwise significant capitalisation requirements associated with establishing a captive. Incorporated in Guernsey under the Protected Cell Company (PCC) legislation, the insurer will segregate assets and liabilities by insured, thus protecting each insured from adverse loss experience of others.
The facility is capitalised by Kleinwort Benson Channel Islands Limited, a wholly owned subsidiary of the Dresdner Bank Group, and Commercial Union; the two firms are subscribing equally to the Ł5million initial capitalisation. J&H Marsh & McLennan in Guernsey, will manage the facility; Commercial Union will provide underwriting services, and Kleinwort Benson in Guernsey will provide investment management and banking services.
Portway Insurance's participants are expected to include:
Small to medium sized companies that want the benefit of captive ownership, but lack the premium volume to justify the expense of establishing their own captives.
Trade associations that want to offer members a package of insurance products incorporating elements of self-insurance. The PCC legislation allows competing businesses to participate in pooled self-insurance arrangements without sharing risk with other members.
Existing captive owners that want a secondary self-insurance mechanism for non-traditional risk financing.
"This new facility brings together three prominent international organisations that are recognised leaders in the development of innovative risk financing solutions and captive insurers," said Stephen Hawkes of J&H Marsh & McLennan. "Portway Insurance will allow a wide variety of businesses to enjoy the benefits of captive ownership without the capital requirement.
"The cost structure will be lower than that of a single parent captive, so the expenses of incorporation and ongoing management do not outweigh the financial benefits that can be achieved," he added.
Development of this new and exciting facility is fully supported by Steve Butterworth, Director of Insurance in Guernsey. "The PCC legislation provides the support for innovative opportunities to further expand Guernsey's position as Europe's leading captive domicile. The combined European networks of J&H Marsh McLennan, Commercial Union and Kleinwort Benson brings tremendous market access and their ability to understand and respond to client requirements is well proven."
Additional information regarding Portway Insurance PCC Limited is available by contacting Stephen Hawkes of J&H Marsh McLennan in London on 0171-945-7669, David Johnstone of J&H Marsh McLennan in Guernsey on 01481-728136, or Roger Day of Commercial Union in London on 0171-662-2192.
J&H Marsh McLennan is the world's leading risk and insurance services firm. It is a major subsidiary of Marsh & McLennan Companies, Inc., a professional services firm which also includes investment management and consulting businesses. More than 36,000 employees worldwide provide analysis, advice and transactional capabilities to clients in over 100 countries. Marsh & McLennan Companies' stock (ticker symbol: MMC) is listed on the London, New York, Chicago and Pacific Stock Exchanges.
Commercial Union was established in 1861 and is one of the UK's leading composite insurers with around 4 million customers and total Group assets and additional funds under management amounting to some o67 billion. In addition, Commercial Union Risk Management provides risk engineering and risk assessment services.
Kleinwort Benson (Guernsey) Limited is a wholly owned subsidiary of Dresdner Bank AG and has been providing offshore banking services since 1963. From the late 1970's it has been particularly involved with Guernsey captive insurance companies, providing investment management, letters of credit and other banking services.
This information is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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