The number of fronting companies available for captive insurers has more than doubled over the last few years–a product of the softening commercial insurance sector and the lures of the ever-broadening alternative risk-transfer market, according to a captive manager.
Indeed, captives have proliferated despite the softness of the traditional insurance market–thanks in part to greater access to fronting companies, observed Christopher L. Kramer, senior vice president of Roundstone Captive Management Ltd., in Westlake, Ohio.
"It seems the insurance carriers that had retreated during the latest underwriting cycle are coming back to the [fronting] market–not only in capacity, but they are expanding their business strategy to recognize the rising popularity of captives," he said, citing, "specifically, protected-cell captives in both property-casualty and life and health."
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