Employee Benefits Cell Captive

In today's fast-paced and unpredictable world, multinational businesses need both agile and consistent benefits strategies to keep their employees thriving. Tailored and flexible benefits not only help employers stand out but also address these growing challenges. In parallel, the rising costs of health and wellbeing benefits — among the most valued by employees — are a growing concern. With global medical inflation projected to reach 10% in 2025, affordability is becoming a critical priority for businesses.

To combat these challenges, many organizations are turning to captive insurance for employee benefits programs. This approach facilitates enhanced control, cost efficiency, reinsurance access, and stronger governance when designing benefit plans.

What is an Employee Benefits Cell Captive?

An employee benefit (EB) cell captive is an insurance solution that enables businesses to self-insure their employee benefits in a simplified and efficient manner, while taking advantage of the benefits of a captive insurance structure.

At Aon, we have developed a dedicated employee benefit cell captive facility in collaboration with several multinational employee benefit fronting networks.

The facility offers the benefits of a traditional captive employee benefit structure, combined with reduced operating costs, accelerated time to market, and significantly reduced local change management efforts.

How Does an Employee Benefits Cell Captive Work?

Our employee benefits cell captive facility uses a protected cell company (PCC) structure to generate operational and cost-efficiencies. The secure, ring-fenced structure allows organizations to implement an employee benefits captive program without the time, cost, and complexity of establishing a wholly-owned captive. The PCC offers the security of an independent captive while benefiting from the sharing of administrative functions across the wider entity.

The facility allows organizations to leverage a broad panel of network partners and continue using their preferred carriers at the local level, while still consolidating risk at the corporate level. This reduces local change management and also allows all stakeholders to familiarize themselves with a self-retention strategy to manage risk and reward.

Advantages of an Employee Benefits Cell Captive Solution

• Benefit Design Flexibility: Equal to a standalone captive setup.
• Cost-Effective: Reduced underwriting margins, simpler setup through pre-approved regulatory concept, and simplified management.
• Joint Risk and HR Driven Agility: Empower key stakeholders to act swiftly.
• Bespoke Consultancy: Embedded captive management, data validation and consolidation, pricing consultancy, and local delivery.
• Significantly Reduced Local Change Management: Potential access to all employee benefits fronting networks, dramatically reducing the need for local policy change management.
• Segregated Cell: To finance desired levels of employee benefits risk retention – and facilitate access to reinsurance markets.
• Loss Mitigation and Claim Management: Leveraging access to enriched cell captive data.

Our Approach - Key Steps to Establishing a Cell Captive

At Aon, we will support you through the whole process, from feasibility to program implementation and review – all tailored to your specific needs from the outset.