Case Study: Telecom – EMEA - Fronting

Background

Historically, this client was the national telecom board of a European country. The client was then privatised and had to put in place more comprehensive insurance programmes owing to the fact that it was not backed by the State anymore. It also set-up some self insurance capacity through the use of a cell in White Rock Guernsey.

Approach

The existing cell was participating in a coinsurance arrangement, along with various European insurers. The coinsurance covered the PD/BI programme of the client in their home country, as well as providing DIC/DIL contingent cover for some overseas territories. However, as the Guernsey cell was not licensed to write admitted business locally, a fronting solution was necessary.

Results

White Rock was able to form a Gibraltar based cell authorised to front the client’s PD/BI programme on a Freedom of Services basis and to provide DIC/DIL cover to the foreign subsidiaries where possible, or directly to the parent company where not authorised locally.

The use of a cell in Guernsey allowed the client to save on the solvency capital requirement and the use of the new White Rock Gibraltar cell allowed them to write direct business across the EU enabling their business operations to run smoothly and manage their total cost of risk.