Alternative Risk Transfers
Managing risks for healthcare and senior living facilities is a complex undertaking that goes beyond traditional insurance measures.
Alternative Risk Transfers (ART) offer specialized options for these unique sectors, enabling the transfer of a wide range of risks, including property and casualty risks, financial risks, and human capital risks.
There are a number of reasons healthcare and senior living facilities can benefit from ART solutions:
- Reduced costs: ART solutions often provide lower insurance premiums than traditional carriers. This is because they can eliminate the need for intermediaries and because they are more tailored to the unique risks faced by individual facilities.
- Improved risk management: ART solutions can help facilities to improve their risk management programs. ART solutions can provide facilities with more control over their insurance coverage, with customized risk management solutions.
- Increase financial stability: ART solutions provide facilities with a source of stable and predictable funding for their insurance needs, helping to reduce their overall financial risk.
- Increased flexibility: With ART solutions, facilities have more flexibility in how they manage their risks. They can choose which risks to insure and how much coverage to purchase.
A captive insurance company is a wholly-owned subsidiary of a company or group of companies providing insurance coverage to its parent company and affiliates. Captives are used to insure a wide range of risks, offering benefits, which include reduced premiums, increased flexibility, and improved risk management.
RRGs are groups of unrelated companies that pool their resources to purchase insurance coverage. RRGs can be used to insure a wide range of risks, and they can offer a number of benefits, including reduced premiums and increased flexibility.
Insurance-linked securities (ILS) are securities that are linked to the occurrence or severity of insured events. ILS can be used to transfer a wide range of risks, and offer a number of benefits, including access to new sources of capital and increased diversification.
Derivatives are financial contracts that are used to transfer risk from one party to another. Derivatives can be used to transfer a wide range of risks, and they can offer a number of benefits, including increased flexibility and price protection.
Work With an Expert
Create an ART Strategy That Works For YOU
Alternative Risk Group experts work with healthcare and senior living facilities to identify the alternative risk strategy that is best suited to their financial situation and risk exposure. Click here to speak with Michael Richards at Westwood Insurance Group.
42% of healthcare and senior living organizations are currently using ARTs*
the average savings for organizations that have moved to ARTs is 15%*
Increase in Captives
The number of captive insurance companies in the US has increased by more than 50% in the past decade.**
ARTs are effective
While statistical data on Alternative Risk Transfers is limited, it does suggest that ARTs are a viable and effective risk management strategy for healthcare and senior living organizations. ARTs can help organizations to reduce costs, improve their risk management programs, and increase their financial stability.