Marsh Establishes ‘Protected Cell Captives’ in Wash. DC, Isle of Man

April 30, 2009

Marsh announced that it has established protected cell captive (PCC) [also known as segregated account] insurance facilities in Washington, DC, and Isle of Man “to serve the needs of small and mid-sized businesses seeking cost-effective risk-financing alternatives, as well as larger firms looking for ways to segregate retained risks associated with joint ventures, strategic alliances, and other special situations. Both facilities have received approval of the regulatory authorities in their respective locations and are accepting business.”

Marsh pointed out that PPC’s are “among the fastest growing alternatives to conventional commercial insurance.” They “offer benefits similar to those available through group and single-parent captives at significantly reduced start-up and ongoing costs, as well as a shorter licensing timeframe.

“Individual businesses and other entities participating in the PCC are insulated from the loss experience, liabilities, and credit risks of other participants, and consequently avoid potential costs, such as additional premium requirements or capital outlays that could arise in group captive arrangements when other participating firms have poor loss experience or more volatile risk profiles.

Michael Cormier, a managing director of Marsh and global leader of the firm’s Captive Solutions Practice, commented: “A growing number of our clients are seeking alternatives to the traditional insurance market, both to avoid the challenges associated with market cycles and to be in a better position to control their own destiny. These new facilities give small and mid-sized businesses another option with which to meet their risk management needs in a cost-effective manner. They also provide larger firms with a timely opportunity to test the waters of alternative risk financing without the potentially significant upfront investment of time and expenses associated with establishing a single-parent captive.”

Marsh’s new facility in Washington, DC, is Mangrove Insurance Solutions, PCC, and the Isle of Man facility is Mangrove Insurance Solutions PCC Ltd. Captives are insurance companies formed by one or more corporations, associations, or government entities as formal mechanisms for self-insuring risk. They are regulated by insurance laws in states or countries where they are located and may be used to underwrite risks beyond those of the entities that own them, subject to applicable local regulations.

Marsh also explained that a PCC is “a single entity in which individual businesses can purchase units or cells to retain and finance their own risk. Legislation governing PCCs enables them to provide legal separation for each cell owner, so that the financial performance, assets, and liabilities of each cell are completely isolated from those of all other cells in the facility.”

Source: Marsh – or

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