Every soft insurance market raises the inevitable question for risk managers: Why do I need an alternative risk-transfer vehicle when I can easily get coverage in the standard market? But to even ask the question is to miss the point of ART.

In theory, the goals for using an alternative risk-transfer structure do not differ significantly between market cycles. Any qualified insured considering long-term benefits of ART will generally find that establishing such a structure in the soft market–which at first may seem counterintuitive–will pay dividends when the market turns.

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