What is a sidecar transaction?
A sidecar investment is a strategy in which one investor allows a second investor to control how to invest their capital. A sidecar investment usually occurs when one of the parties lacks the ability or confidence to invest for themselves.
What is a sidecar policy?
Sidecar Health offers a fixed indemnity plan, which means that it pays a specified amount for each type of health care service or treatment. You’re responsible for paying the remaining balance of the medical costs. Each of the covered services is listed in the policy, alongside how much it will pay.
What is reinsurance accounting?
Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim. The party that diversifies its insurance portfolio is known as the ceding party.
What is collateralised reinsurance?
Collateralized reinsurance refers to a reinsurance contract or program which is fully-collateralized, typically and in the cases we are most interested in on Artemis, by investors or third-party capital.
How does a reinsurance sidecar work?
A reinsurance sidecar solicits investment in a quota share treaty with an insurance company. Under the quota share treaty the ceding company and reinsurer share premiums and losses on a fixed percentage. These sidecars are used by insurance companies to underwrite a portion of their book of business.
What type of insurance is sidecar?
The technical name for Sidecar Health’s current plans is fixed indemnity insurance, because they pay a fixed amount for each prescription or service.
What are reinsurance receivables?
Reinsurance receivables Life insurance companies pay premiums for reinsurance to other insurance companies to spread or allocate the risk of high-value policies they underwrite. Reinsurance receivables are credits to reinsurance companies such as claims and premium refund of cancellation and lapse.
What is an ILS fund?
Essentially, ILS is a way for companies to buy protection against the risk of incurring a loss as a result of an event. An investor in ILS will receive interest payments, paid out of the insurance risk premium plus a money market return. As such the return is mainly determined by the insurance risk assumed.
What is xol reinsurance?
Excess of loss reinsurance is a specific type of reinsurance where the ceding company is compensated for losses that exceed a specified limit.
What does it mean to have a reinsurance sidecar?
A reinsurance sidecar, sometimes referred to as a reinsurance sidecar vehicle or simply a sidecar, is a financial structure established to allow investors (often external or third-party) to take on the risk and benefit from the return of specific books of insurance or reinsurance business. Looking for a list of reinsurance sidecars?
Is there such a thing as a sidecar?
Sidecars are perhaps becoming a little less popular now that collateralized reinsurance has grown in use as an alternative to the sidecar structure. See our list of reinsurance sidecars.
How did Katrina affect the reinsurance sidecar market?
The 2005 hurricanes of Katrina, Rita, and Wilma caused insurance rating agencies, like A.M. Best, to set new reinsurer capital requirements. These companies created more sidecars to free up this capital, and the reinsurance sidecar market grew.
Why do you need to invest in a sidecar?
Since sidecars exist for an agreed-upon period, investors can take advantage of the reduced risk from the investment’s shorter tail. Reinsurance sidecars generally limit investors’ exposure to their invested capital, since most require sufficient investment to cover claims which arise in the underwritten policies.