Case Study: Real Estate – USA – Retention

Background

As a Real Estate Investment Trust (REIT), the client has a number of properties that need to be insured from dollar one coverage. However, the insurers wanted the REIT to take a deductible, which they were prepared to limit by also having an annual aggregate.

Approach

Aon set up a White Rock cell which is fully secured by premium equal to the aggregate limit. The premium together with the cost of the cell is recoverable from the tenants so the set up proposed by Aon is cost neutral to the client, and any underwriting profit is captured by the client and not the commercial insurers.

Results

Due to the savings from the insurers for taking the deductible, the cost charged to the tenants is comparable to prior years. Aon was able to provide an innovative, value added solution to the client which strengthened the relationship. Our significant experience in this area enabled us to provide a tried and tested cell solution which, compared with a stand-alone captive, was quicker and less expensive for the client.