This practice area involves risk solutions that go beyond traditional insurance. Here are the three key challenges:

  • Determining how much risk to retain
  • Financing the alternative risk retention (Alternative Risk Financing)
  • Creating a risk transfer vehicle (Alternative Risk Transfer)

When the options for alternative risk financing include risk transfer, there are many solutions available designed to 1) improve the business’s balance sheet, 2) improve the business’s income statement via higher net income or reduced volatility in net income, 3) enable a project or transaction, and/or 4) meet a regulatory requirement.

The potential solutions include:

  • Captives
  • Loss Portfolio Transfer
  • Strategic Liability Transfer
  • Integrated Risk Programs
  • Portfolio Credit Insurance
  • Credit Enhancement
  • Credit Wrap
  • Residual Value
  • Revenue Floor
  • Customized Derivatives
  • Weather Hedges
  • Forced Outage
  • Other Multiple Trigger Programs
  • Contingent Capital
  • Reps and Warranties

Credit risk, weather risk and forced outage are often among the most common requests. In each case, the programs can be customized for greater protection or for catastrophic protection, dictated by budget and risk tolerance.