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Insurance

InsurancePension and BenefitsRisk Management
December 13, 2023

Pension Risk Transfer Calculus: Costs, Benefits, Risks

Considering cost is crucial when evaluating the benefits of a pension risk transfer. The pension risk transfer (PRT) market stayed hot this year after setting a record in 2022 that included a $16 billion transfer by IBM. And there are signs—both qualitative and quantitative—that PRT volume will continue to grow as more companies with well-funded plans seek to remove pension liabilities from their balance sheets. “Anecdotally, treasurer-level members have indicated that doing a PRT transaction is likely,” said NeuGroup’s Scott Flieger, who leads NeuGroup for…
Justin Jones
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InsuranceRisk ManagementTalking Shop
September 21, 2023

Talking Shop: Charging Stores for Workers’ Comp Insurance Claims

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected]. Context: Members of NeuGroup for Retail Treasury represent a variety of businesses that operate thousands of stores, restaurants and other retail outlets where the safety of customers and workers is a preeminent priority. But accidents inevitably occur. So it’s essential that companies managing the risk of people being injured at their facilities have workers’ compensation…
Justin Jones
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Cyber riskInsuranceRisk Management
February 9, 2023

Ray of Hope: Cyber Catastrophe Bonds May Boost Insurer Capacity

The first cyber cat bond could spell some relief for corporates navigating a hard market for cyber insurance. Corporate treasurers and risk managers whose companies face ever-increasing cyber risk may soon have a new tool to discuss with brokers and insurers as they build insurance towers and navigate the hard, capacity-strained market for cyber coverage: catastrophe bonds. Last month, U.K. insurer Beazley sold $45 million in cyber cat bonds, the first deal of its kind—following more than a decade of discussion about…
Justin Jones
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InsuranceRegionalRisk Management
August 25, 2022

When To Buy Political Risk Insurance—and When It’s Too Late

WTW’s Laura Burns discusses policies that insure losses caused by geopolitical crises not covered by traditional insurance.Companies including McDonalds and ExxonMobil have reported billions in losses from shutting down business and other events related to Russia’s war in Ukraine. Some of that financial pain may have been avoided if corporates had purchased political risk insurance long before the crisis started, according to Laura Burns, who heads the political risk practice for WTW, formerly known as Willis Towers Watson. In a video you can watch…
Justin Jones
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InsurancePension and Benefits
June 3, 2021

Bridge the Gap or Vive la Différence: Insurers vs. Pension Plans

Can corporate pension managers learn from how insurance companies invest their pension-related assets?So-called pension risk transfers (PRTs) allow corporates to negotiate with insurance companies to take on a pension plan’s liabilities and remove interest rate and longevity risk from the company’s balance sheet. In the US, PRT transactions totaled about $25 billion in 2020, with $14 billion of that coming in Q4, the highest quarterly volume since 2012.That context formed the backdrop for a recent meeting of NeuGroup for Pensions…
Justin Jones
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Capital AllocationInsurance
March 18, 2021

Where Captives Fit in the Insurance Puzzle Corporates Want to Solve

Captives offer tax advantages and flexibility, but treasury teams must make sure trapping cash in them is worth the benefits.Rising insurance costs are putting more focus on captives, a solution that offers tax advantages, flexibility and lower costs than traditional insurance. For those reasons and others, several members at a recent meeting of NeuGroup for Retail Treasury said they plan to expand their captives to cover more risk.Other members say captives are not a good use of capital for their…
Justin Jones
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InsuranceRisk Management
March 9, 2021

Insurance and the Efficient Frontier: What Happens in a Soft Market?

NeuGroup members respond to Willis Towers Watson’s risk strategy of using modern portfolio theory for insurance. Willis Towers Watson recently presented to NeuGroup members an approach to modernizing how corporates buy insurance. As NeuGroup Insights explained last week, it involves modern portfolio theory and the efficient frontier. The presentation intrigued many members, including one who said WTW provided a great overview of the central idea. He wondered how treasury would effectively convey this new way of managing risk to the CFO…
Justin Jones
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InsuranceRisk Management
March 4, 2021

Solving the Insurance Problem With an Efficient Frontier for Risk

Willis Towers Watson advocates an approach that makes use of modern portfolio theory to assess the true value of insurance.For more than a year, buying and renewing insurance policies has been a severe pain point for many finance teams, all suffering through a hard market of rising premiums, higher retentions and lower capacity. And the pandemic. That makes now a good time to consider a modernized approach to insurance and risk finance strategy that takes what Willis Towers Watson (WTW) calls…
Justin Jones
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InsuranceRisk Management
December 8, 2020

Rethinking Risk: Who Needs Insurance When You Have ERM?

Relying on ERM instead of insurance is probably extreme, but robust risk management might reduce premiums. Have surging insurance premiums got you down? One answer to controlling these costs could be to resurrect your enterprise risk management program or bolster an existing one. This was one takeaway from NeuGroup’s H2 Treasurers’ Group of Thirty (T30) meeting, where one member said his company was unwilling to pay increases in premiums that in some cases have more than doubled. As has been well-documented…
Justin Jones
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InsuranceRisk Management
December 3, 2020

Softening the Blow of Rising Insurance Rates With Differentiation

Risk managers at life sciences companies hear analysis, share pain, discuss options. Virtually no company is immune to the ongoing pain meted out by rising insurance premiums in the wake of the pandemic. But one way to soften the blow, when possible, is differentiating yourself from the pack. That takeaway and others emerged this week at a NeuGroup meeting for life sciences treasurers featuring an update on property insurance and directors and officers (D&O) coverage by Brad Zechman, an account executive…
Justin Jones
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