Alternative Risk Transfer Programs
Vanliner Insurance Company is a leader in Alternative Risk Transfer (ART), or captive, programs for the moving and storage industry. If you are an industry-leading moving and storage agent seeking to capitalize on your expertise, we can work with you to create an innovative and intelligent insurance program.
Vanliner is dedicated to providing concierge claims service to all of our ART accounts, which is achieved by maintaining a collaborative relationship that focuses on a heightened level of communication and exceptional customer service. Our team is committed to launching and growing successful group and individual large account captives. We pursue partners who are industry leaders and understand the long-term rewards of ART programs. Vanliner, along with parent company National Interstate Insurance Company, have nearly 20 years of experience administering ART programs.
What is alternative risk insurance?
Alternative Risk Transfer, or ART, insurance is where you become, in essence, your own insurance company. With ART, you pay the premium into your customized program. If you don’t suffer significant losses, a portion of that premium, along with investment income, may be returned to you.
With a traditional insurance program, you pay the premium to an insurance company in return for insurance protection. The insurance company bears the risk, but also reaps the financial rewards if you control your claims.
If you are a member insured through a group ART program, the risk and reward are shared between you, Vanliner and other members. Groups that mitigate their losses can enjoy larger profits. Therefore, ART programs are best suited for companies that typically perform better than their peers when it comes to preventing losses and managing claims.
Is ART right for me?
- Suited best for safety-conscious companies
- High-performing companies can have a portion of premium returned
- High-performing companies can earn investment income
Are you a best-in-class operator with losses that are typically lower than those of your industry peers? If so, you may consider capitalizing on your good record and years of experience by joining an ART program.
When managed correctly, the long-term financial benefits of ART participation with Vanliner can be great. With the potential for return of unused premiums and investment income, you can lower the effective cost of your insurance and enjoy more stable premiums. It’s an intelligent financial move for companies like yours.
Benefits that go beyond savings:
- Enhanced loss control, risk management and claims services
- Minimum and maximum costs known in advance
- Long-term control over unpredictable insurance pricing
- No capital investment / reasonable collateral requirements
- Easy entry and exit
Alternative Risk: FAQs
No. Vanliner offers innovative ART programs for moving and storage companies of nearly any size. By offering ART programs with low-risk retention levels, even companies with as few as 15 units can comfortably participate in a risk-sharing program.
In some respects, a large deductible and an ART program are similar in that the insured is assuming a significant amount of risk. However, with a large deductible, the worst case scenario is unknown and potentially more severe. With an ART program, the overriding goal is to stabilize the price of insurance from year to year and, over the long term, recognize a reduced cost of insurance. Further, an ART program typically requires far less collateral than a large deductible plan and provides a cap on the worst-case scenario through an aggregate stop loss feature. Finally, ART participants generally recognize a markedly different level of service and sophistication from their insurance carrier. Most ART participants see dramatic improvements in overall risk management.
When considering an ART program, one must think of the bigger picture - the overall, total cost of insurance over several years. Traditional insurance moves in cycles, and in some years traditional insurance premiums may be "cheaper" than an ART program. However, when looking at the net effective cost of risk financing, the services provided, and actual value received, ART programs are frequently the best long-term solution for larger and more sophisticated clients.
Perhaps the most significant benefit of choosing an ART program is your ability to better control cost of risk. Unlike the traditional insurance market, premiums in ART programs are less affected by stock market returns, natural disasters and insurance capacity. So, while premiums in the traditional insurance market fluctuate between hard and soft market cycles, the cost of risk when managed through an ART product can be more stable and predictable through any market cycle.
An ART program also gives the insured the ability to reduce cost of risk through the potential return of premium in the form of underwriting profit and investment income. These funds are distributed to companies who manage losses effectively. Further, in an ART product, a true partnership is built between the insured and insurance carrier, improving communication, claims outcomes, and satisfaction with the insurance program. Flexible risk retention options, favorable collateral requirements and a built-in aggregate stop loss are also benefits of ART programs.
For our ART clients, Vanliner provides a streamlined package of services that make ART participation simple and painless, including:
- Exclusive ART service staff
- Cayman Island based ART reinsurance facility
- Access to our surplus, licenses and admitted paper
- Policy issuance
- Investment services
- Financial reporting
- Claims handling
- Risk management
- Aggregate stop loss protection
- Access to Senior Management
A captive is an insurance company formed specifically to insure the risks of a parent company or a group of companies. The ART policyholder owns or "rents" the insurance company that insures it.
The terms simply refer to the class of business that the captive is insuring. A homogeneous captive is one that insures the risk of common classes of business. For example, a homogeneous group captive may insure a collection of moving and storage companies. A heterogeneous captive, in contrast, might have a moving and storage company, a mining company and a drywall contractor all sharing risk in the same group captive.
A single-parent captive is an insurance company formed to insure the specific risk of one company (and its subsidiaries), whereas a group captive insures the risks of multiple non-related companies.
The ART option should be considered when you feel that your claims results are outperforming the moving and storage industry. Once you have established consistent positive claims results and a dedication to safety and loss control practices, you should consider the ART option.
Vanliner issues the A rated primary insurance policies and can place or assist in placing excess insurance.
Alternative Risk Transfer programs require significant expertise and a substantial ART infrastructure. Vanliner’s parent company, National Interstate, manages more than a quarter billion dollars in ART premiums and, as such, has developed considerable expertise and economies of scale with its ART offering. Vanliner is a leader in ART programs for the moving and storage world.
Vanliner is admitted in all 50 states, rated "A" (Excellent) IX by A.M. Best, and over the past 30+ years has become recognized as a heavyweight in the moving and storage insurance industry. With nearly 20 years of experience in ART between Vanliner and parent company National Interstate, our expertise is unrivaled for alternative risk solutions.
For more information about Vanliner’s ART programs, contact: