Our approach
We start with the loss, not the renewal.
The usual sequence is: the renewal date arrives, the market is tested, a price is quoted, and the decision is made against last year’s premium. That works for simple risks. It fails wherever the risk is large, unusual or concentrated — because nobody has answered the prior question.
The prior question
What should this risk cost, and how much of it should the client keep?
Without a view, price has no anchor
A quote is only cheap or expensive relative to something. If the only benchmark is last year’s premium, the client is negotiating against their own history rather than against the risk.
Without a view, retention is a guess
The decision to transfer is a capital-allocation decision. It requires a distribution of expected loss, not a single figure, and it requires the alternatives — retention, captive, parametric — to be priced on the same basis.
Without a view, “do not transfer” is unsellable
An adviser whose income depends on a placement being made has a reason to find one. That is not a criticism of anyone; it is how the market pays. It is why we charge for the analysis separately, and why we tell you how we are paid before we start.
Three phases
This is the spine of every engagement.
01 — Origination
We form an initial view of the risk before the market is approached: an expected-loss hypothesis with a range, and a sense of what a rational price would look like. It is held internally. It is never disclosed to underwriters.
02 — Analysis
Loss data is cleaned, drivers are engineered, and the distribution is tested and refined. Basis risk, sensitivity and stress are quantified. The output is a four-way recommendation: retain, transfer, captive or parametric.
03 — Risk financing
Structure is designed and executed: limit, term, trigger, capital stack, documentation, consents. The capital case is re-tested against the terms actually on the table before binding.
The four routes
Every recommendation resolves to one of these, or a combination of them.
Retain
Keep the risk, fund it deliberately, and stop paying a loading for volatility the balance sheet can absorb. Usually the right answer for the lower layers of a well-understood portfolio.
Transfer
Buy capacity in the market — but at a price that can be justified against the expected loss, and on terms that will still be there at renewal.
Captive
Formalise retention in a licensed vehicle, with the governance and capital that implies. Attractive where market pricing carries a persistent loading.
Parametric
Pay on an index or a physical trigger rather than on indemnity. Faster, more certain settlement, and easier to restructure or commute — at the cost of basis risk, which must be quantified rather than assumed.
The test before we recommend anything
A structure is only recommended if it survives three questions.
On a probability-weighted basis across the plausible range of outcomes for this risk — not on a single forecast year.
The downside scenarios are modelled against what the client, or the capital provider, can actually absorb.
If the next three years are not average, the structure should allow the position to be changed without destroying NPV.
Two documents, never one
We keep the client’s internal pricing view and the market submission strictly separate.
The internal view
Contains the expected-loss analysis and the advisory thesis. It stays with the client and with us.
The market submission
Contains risk data only. No pricing guidance, no internal view. Disclosing the client’s own view to an underwriter transfers NPV from the client to the market.
How we are paid
The subject most advisers avoid, and the one that decides whether the advice is worth having.
A fee for the analysis
The diagnostic and the modelling are a paid piece of work in their own right. That is what makes “do not transfer” an answer we can afford to give.
An arrangement fee if something is placed
Where a structure is placed, we charge an arrangement fee. It is agreed in writing before we begin, and it is disclosed to the client.
Commission, where that is how it works
Where we are remunerated by commission from the market rather than by fee, we tell you the rate and the amount before anything is bound.
Every engagement starts with the risk, not the renewal date.
If you want a second view before you commit to a programme, a structure or a renewal, that is the conversation to have.
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