Aon develops dedicated employee benefit cell captive
Aon has developed what it calls a dedicated employee benefit cell captive facility in collaboration with several multinational employee benefit fronting networks.
An employee benefit cell captive is an insurance solution that enables businesses to self-insure their employee benefits in a simplified and efficient manner, while taking advantage of the benefits of a captive insurance structure.
Aon’s facility offers the benefits of a traditional captive employee benefit structure, combined with reduced operating costs, accelerated time to market, and significantly reduced local change management efforts.
The cell captive facility will use a protected cell company (PCC) structure to generate operational and cost-efficiencies. The secure, ring-fenced structure allows organizations to implement an employee benefits captive programme without the time, cost, and complexity of establishing a wholly-owned captive.
Aon said the PCC offers the security of an independent captive while benefiting from the sharing of administrative functions across the wider entity.
The facility allows organizations to leverage a broad panel of network partners and continue using their preferred carriers at the local level, while still consolidating risk at the corporate level. This reduces local change management and also allows all stakeholders to familiarize themselves with a self-retention strategy to manage risk and reward.
“Multinational organizations need agile benefits strategies to keep their employees thriving and build a resilient workforce,” said Michael Pedel, head of global benefits at Aon. “However, businesses can face difficulties integrating risk management and employee benefits due to historical operating in silos. By uniting our Risk Capital and Human Capital expertise, we are helping organizations make better decisions, enabling employers to enhance their benefits strategies while gaining greater control over costs and risk transfer mechanisms.”
Ciaran Healy, global captive leader for Commercial Risk Solutions at Aon, added: “The rising costs of healthcare and employee benefits require businesses to think differently about how they manage risk. This facility provides an efficient and accessible way for organizations to leverage cell captives for employee benefits – an option that was previously unavailable to clients.”
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
