Cyber Risk Control

Risk Transfer

Using Risk Financing Through Captives, Alternative Risk Transfer and Insurance Options

Captive Formation, Management, Alternative Risk Transfer Options

Captive Formation & Management

Unlike other companies who utilize boilerplate methodologies for valuing cyber threats, Quantar’s patented proprietary technologies and methods have been developed for over a decade in conjunction with award winning actuarial specialists in the cyber threat field.

By using our applications, your organization will be able to assess whether the risk exposure is such that part of it should be transferred out of the company by using insurance. There are limitations on the values that risk carriers are willing to accept.

In many cases using a captive insurance entity not only eliminates this problem, but also provides a far better value proposition. A captive can provide:

  • Greatly enhanced control over your organization’s insurance program structure
  • An ability to cover cyber risks that are not offered by traditional insurers
  • A reduction in premium/rate volatility
  • Increased capacity and coverage for cyber threat exposure values
  • Tax efficiencies from directly owning the risk carrier vehicle
  • Enables access to the reinsurance market in a cost-efficient manner

Quantar works with strategic financial partners in order to provide specialist knowledge and skills in the formation and management of captives. Whether you are looking to form a new captive or optimize your existing captive program, our partners, working in conjunction with our cyber threat valuation applications, can provide you with in-depth professional knowledge and guidance.

We are able to provide your organization with all the data you require through our cyber threat valuation capabilities that leads in turn to a captive feasibility study. This will provide you with:

  • How captives operate within today’s global insurance market
  • What the advantages and disadvantages of a captive are
  • An in-depth analysis of proposed retentions and retained coverages assumed by the captive
  • Financial projections (covering a 5-year period) which includes balance sheets and income statements
  • A proposal for the structure, formation, and operation of a captive insurance company
  • An explanation and comparison of captive domiciles, including regulatory requirements

Once the feasibility study has been reviewed and captive insurance remains an option for your organization, our strategic partners will then undertake an operational review. This will provide you with:

  • An evaluation and comparison of your current insurance program evaluation to the captive business plan
  • Captive operations analysis including detailed examination of internal controls and data processing
  • The captive’s regulatory framework analysis and compliance requirements for governing regulations
  • An appraisal of the captive’s third party service providers (audit, legal, actuarial, claims management)

Quantar, in conjunction with our strategic partners is able to able to provide complete structuring of your organization’s insurance program, providing fronting, risk transfer, and captive management.

Captive/No Captive

Risk transfer financing through a captive provides an efficient use of capital through the return of any profit at the end of the coverage term

Captive ART

Using the alternative risk transfer market for ceding a percentage of the overall risk exposure can benefit through reduced risk pricing by the market

Alternative Risk Transfer

Although captive insurance is a form of alternative risk transfer, Quantar differentiates other forms of ART from captives.

Through our strategic partners, coupled with your organization’s cyber threat financial valuation, Quantar is able to provide access to the ART market for larger corporations and smaller risk carriers.

Our strategic partners can provide innovative structured ART solutions based upon your cyber threat valuation and value to be transferred. Their significant risk-bearing and risk financing capabilities, along with in-depth knowledge and technical expertise can provide you with a number of alternative risk solutions programs.

Benefits of using our applications and our partners’ ART solutions include:

  • The opportunity to benefit from positive loss experience – see diagram
  • A reduction of the total cost of cyber risk
  • Reduced volatility in coverage rates, capacity, and coverage
  • Flexibility in deductible – by location/SBU
  • Optimization of risk retention strategies
  • Enhanced tax efficiency
  • Interest earned on premiums is fed back to future coverage – see diagram
  • Provides a cost effective alternative to captive ownership
  • Positive fund balances are returned to your organization upon commutation
  • Facilitates access to risk transfer only available at higher attachment points
  • Provides premium payment flexibility
  • Freeing up of your organizations capital
  • May be used to offset captive liabilities
  • Liabilities are ring-fenced

Cost certainty for existing cyber threat exposures using Quantar’s proprietary technology to ascertain financial exposure is the key to effective and efficient cyber threat risk management.

Securitization Market

Because risk is diversified, the options for the type of securitised product that can be offered to the ART market are increased, reducing exposure and lower risk financing cost

Quantar & the ART Market

Where risk carriers mandate the implementation of of technologies, there is continuous risk exposure valuation thereby acting as a facilitator of the ART market that otherwise may be unwilling to provide a product or at an uneconomic cost to the primary insurer to pass on

Insurance & GDPR

Quantar is able to work collaboratively to secure the correct risk transfer options, including insurance. Our experience working for a number of U.K. and European based insurance companies enables us to identify the carrier most suited to your organization’s needs. The parameters involved in securing the correct type and level of coverage will determine in part who we would seek to involve in any risk transfer discussions.

For the GDPR, insurance is included in terms of risk transfer. A Data Protection Impact Analysis (DPIA) is required and within the overall mapping of risk exposure against risk appetite, there is provision for the transference of risk to an external party via insurance. It is thus crucial for GDPR projects to take account of the importance and role that insurance may provide in complying with the provisions of the GDPR.