HSBC Insurance Management - Insurance / Reinsurance Administration Services

HSBC Insurance Management is the marketing name under which the HSBC Group provides third party administration services for insurance / reinsurance companies and risk retention groups.

HSBC Insurance Management is headquartered in London and operates in Bermuda, the Cayman Islands, Guernsey, Malta, New York, South Carolina, Washington DC and Vermont.

HSBC Insurance Management is one of the world's largest independent insurance managers with nearly 200 client relationships across a wide spectrum of industries, service providers and other businesses. HSBC Insurance Management is part of HSBC Insurance Brokers Holdings Ltd.

In 2005, HSBC Insurance Management was recognised by the Cayman Islands Monetary Authority as 2005's leading 'Captive Manager' in Cayman, being responsible for establishing almost 30% of the 59 'captive' insurance companies licensed by the Cayman Islands Monetary Authority in that year.

INSURANCE MANAGEMENT MARKET OVERVIEW

The growth in this type of insurance service is due in large part to the cyclical nature of the insurance market. The commercial insurance market will continue its hard and soft cycles, but there is a shift in opinion as to how much risk needs to be pooled in the external market when it could be managed in another way.

Amongst HSBC Insurance Management’s newest clients are captive owners who have experienced too many insurance market cycles and have improved both their risk management capabilities and financial sophistication.

Entities that take the step of forming a captive insurance company or risk retention group invest more than capital: they invest their time and other resources in the process. They are looking ahead and are unlikely to take a backward step. This is not to suggest that their dependence on the commercial market will go away - the insurance market exists for very sound reasons. What is happening is a move towards optimisation of risk transfer techniques, both traditional and new alternative mechanisms.

HOW OUR INSURANCE MANAGEMENT SERVICES WORK

Insurance management services required by risk retention groups, captives and cells can differ between domiciles. We provide a full range of services, suited to clients' needs including:

• Preparing a feasibility study - the decision to form a risk retention group, captive or cell will need a detailed analysis and assessment of the parent's risk profile, loss experience and premium expenditure
• Drafting the business plan - if the feasibility study confirms the need for a captive, the next step is to prepare a business plan and licence application for consideration by the chosen domicile's regulatory body
• Registering and incorporating the captive - once the licence application has been approved by the regulatory body, the company can be registered and incorporated
• General representative - most domiciles require the captive to be managed by a general representative, or equivalent - we will perform this role, as well as providing the registered office and secretarial services for the captive
• Full range of 'cell captives', via use of our segregated portfolio, segregated account or protected cell companies

FURTHER INSURANCE MANAGEMENT SERVICES

• Maintaining accounts and financial statements of the captive: including liaison with local auditors and, if appropriate, the parent's auditors
• Underwriting: full underwriting service for those clients that require this service
• Monitoring investments: on behalf of the captive
• Recommendations for local directors, where appropriate: experienced independent directors as required by the captive
• Board matters: preparation for and attendance at captive board meetings, presentations, taking minutes and other activities relating to such meetings

Other services provided include: assistance with the selection of independent service providers; statistical analysis; liaison with regulators; placing reinsurance; and, when necessary, arranging for fronting companies.