Alternate Risk Transfer

Explained

Alternate Risk Transfer (ART) refers to innovative risk financing and management strategies that fall outside traditional insurance structures.

These solutions are designed to address complex or niche risks — particularly when conventional insurance is unavailable, unaffordable, or insufficient.

As companies face tightening capacity and rising premiums, ART has gained significant momentum for those seeking tailored, cost-effective alternatives to manage and transfer risk.

At SRT, we specialise in designing and implementing bespoke ART solutions for corporate and financial clients.

Our focus is on structuring tailor-made, multi-line, and multi-year risk finance programs that align with your broader risk management objectives.

We assist clients in:

Managing hard-to-place or emerging risks
Unlocking liquidity through structured risk financing
Establishing captive and cell-captive structures
Gaining greater control, transparency, and efficiency in risk spend

While ART encompasses a wide range of mechanisms, our work is primarily focused on structuring contingency or cell captive insurance solutions.

These vehicles allow businesses to participate in their own risk financing through licensed (re)insurance structures — without needing to become insurers themselves.

BENEFITS OF ALTERNATE RISK TRANSFER

Cost

When structured effectively, ART can significantly lower the long-term cost of insurance and risk.

By retaining underwriting profits and investment income, businesses can reduce reliance on traditional insurance markets and optimise capital deployment.

Distribution Company - Captive Insurance for Credit Risk

A prominent wholesale distribution company with significant revenue in debtor receivables faced substantial credit risk, which traditional credit insurance could not adequately address due to high premiums and insufficient coverage.

To manage this, the company established a captive insurance company, allowing for tailored policies to cover specific credit risks, such as debtor default and late payment. This approach offered more comprehensive coverage, reduced insurance costs by retaining underwriting profits, and provided financial stability by investing funds set aside for credit losses.

By employing captive insurance, the company gained greater control over credit risk management, which significantly improved its overall business resilience and performance.