Aon to Push Middle-Market Captives

March 11, 2004

Chicago-based brokerage giant Aon Corp. has formed Aon Alternative Risk Underwriting (ARU), a managing general underwriter that provides group captive solutions for middle-market U.S. companies.

Working through independent agents and brokers, ARU group captive solutions are aimed principally at private companies or closely held public companies that have a better-than-average loss experience, solid financial condition, and pay multiline premium between $200,000 and $2 million, Aon said in a statement. The captives are all member-owned group captives, not single-parent or so-called rent-a-captive programs.

ARU coverages can include primary casualty lines of business, workers compensation, general and product liability, and commercial auto. Commercial property and business interruption, D&O and other coverages can also be considered, typically after casualty coverages are established.

Group captive formation requirements include six to 12 qualified insureds with good historical loss and exposure information, who generate $5 million or more in premium. A captive solution has potential application in a variety of business segments, including transportation, manufacturing & distribution, agribusiness and food wholesalers, equipment dealers, and construction, among others, according to Aon.

ARU, a unit of Aon Underwriting Managers, offers captive formation services, underwriting management, administrative services, accounting and shareholder services, fronting and reinsurance placement as well as umbrella coverage above the captive.

Aon Underwriting Managers (AUM) is a group of managing general agents and underwriters specializing in niche insurance solutions in North America, Europe and Australia/New Zealand.

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