8 December 2015Actuarial & underwriting

JLT Towner lists captive cell advantages

JLT Towner Insurance Management (USA), the captive insurance consulting firm, has released a factsheet listing the advantages of cell captives.  The factsheet, posted on its website, coincides with the firm's recent launch of its latest captive cell facility, Isosceles Insurance Company.Among the advantages of captives it lists include lower start-up and administrative costs, fast licensing than other captives and premiums that may be tax deductible.  Other advantages of cell captives include the fact that underwriting profits and losses belong to the individual cell owner, not to a traditional insurance company; that the cell owner gets to reinvest underwriting and investment income; and that cells are ideal for single-purpose reinsurance transactions of any size. JLT Towner does list some disadvantages too however, including the fact that each cell owner must contribute adequate surplus to cover liabilities and that the core company typically requires full collateralisation of liabilities, including those that may be established to pay claims over a long period of time.  Isosceles is as a Connecticut-domiciled sponsored cell facility available to clients and prospects seeking to set up single-parent or producer-owned cells, or to join industry-specific and non-specific group cells.  JLT has separately established Isosceles entities in other captive insurance domiciles, including Bermuda, Barbados and Guernsey. Thomas Stokes is chief executive officer of Isosceles in the US.