Case Study: Pharma - USA - Retention

Background

Due to the requirements of Solvency II, the client wished to close its European based captive and move the legacy business to another USA owned vehicle which could also write the prospective programs. A cell in White Rock was the most appropriate vehicle, since the client was looking to reduce its overall number of subsidiaries and so a newly formed stand-alone captive was to be avoided.

Approach

Aon’s approach was to set up a cell in White Rock to meet the client’s requirements. As this meant the client did not have to set up a stand alone entity no capitalization was required.

Results

The result for the client was the avoidance of capitalization and its replacement with a parental guarantee which will only be called upon in the event of unexpectedly high claim activity.

The use of a cell also avoided the protracted approval process associated with a stand-alone captive and associated cost structure. The cell was readily accepted by the fronting insurers as a replacement for the legacy captive.