Creating programs, structures outside the box.
Artex offers Program & Facility Management solutions to enhance and expand the opportunities and results clients and brokers seek in addressing risk. Our Program Management services include workers compensation solutions for Temporary Staffing firms and PEOs. We also established an innovative risk pooling facility, which enables more businesses to participate in and leverage the benefits of alternative risk solutions. With our Facility Management solutions, we provide expertise and talent to enable brokers, intermediaries, Managing General Agents (MGAs) and others to deftly capture underwriting profits.
For more than 20 years, Artex has been providing workers compensation solutions to the PEO and Temporary Staffing industry on behalf of Zurich North America. We offer both a Middle Market PEO workers compensation program and Large Risk PEO program, providing everything from guaranteed cost to loss-sensitive solutions to address the unique needs of today’s leading PEO industry practitioners. Staff Guard, our guaranteed cost workers compensation program, provides Temporary Staffing firms with turnkey solutions, including unbundled claims administration and management services, pay-as-you-go options and 24/7 online access, to loss runs, certificates of insurance and more.
In 2014, we formed Copper Mountain Assurance, a Utah-domiciled captive insurance company, designed as a risk pooling facility exclusively for Artex clients. Copper Mountain currently has three risk pools: Enterprise Risk Program (ERP), Management Liability Program (MLP), and Deductible Reimbursement Program (DRP). Each of these pools is a separate risk bearing unit where losses in one unit do not affect the other.
We also have the Artex Exchange (AEX), a pooling arrangement designed for businesses that retain risks with large deductibles or self-insured workers compensation plans. AEX provides significant financial benefits by addressing the challenges associated with retaining risk: increases in annual loss volatility and meeting the risk distribution test required for a captive to qualify as an insurance company for federal tax purposes. With AEX, each business pays an amount equal to its estimated workers compensation losses into the AEX program. These risks and payments are pooled and transferred on a pro-rata basis to the related captives, with each captive owned by a business participating in AEX. Through this pooling arrangement, AEX can reduce the volatility of annual comp losses for individual business while also allowing captives to diversify their risks. With a captive and AEX in place, the business may take a tax deduction for the premiums paid to AEX, as the pooled workers compensation risk helps the collective meet the risk distribution test.
Facility Management: Use of Captives to Generate Underwriting Profits
Insurance intermediaries, brokers, MGAs and others who have developed profitable accounts of business are increasingly seeking innovative structures to grow their revenue and gain greater influence and control over their underwriting capacity. In order to do this, a Producer Owned Reinsurance Company or Cell (PORC) can be established to provide the ability to underwrite, on a reinsurance basis, a portion of the insurance products. This allows insurance producers to share in their underwriting risk and capture profits lost to the commercial market. We establish the PORC with the use of a Protected Cell Company (PCC) as the reinsurance vehicle, which delivers the advantage of low set-up costs and capital requirements. Our services include initial assessment, feasibility study, license application and ongoing captive management. This innovative approach is ideal for all classes of insurance business, particularly short-tail lines with low claims volatility.
Artex has also developed an innovative captive solution to help property owners and managing agents in the real estate industry to produce revenue from insurance arrangements. With a PCC structure, property owners and managing agents share in the underwriting of the property portfolio and receive the ROI being generated from blocks of insurance policies.