Loss Portfolio Transfer

A Loss Portfolio Transfer/Buyout (LPT/Buyout) program provides creative risk management solutions for clients seeking to transfer accrued liabilities arising out of past or ongoing operations

Under Krauter & Company’s innovative approach, a carrier will assume a client’s liabilities that may have developed over time, thereby eliminating the uncertainty of adverse loss development and enhancing a client’s balance sheet as well as the prospects for merger, acquisition or divestiture. LPTs essentially capitalize the time value of loss reserves, and are a form of retrospective reinsurance. The premium is the net present value (NPV) of the outstanding claims plus a loading for expenses, risk capital, and margins, (and will include a level of profit that may be assessed explicitly or implicitly within the margins).

WHY KRAUTER LOSS PORTFOLIO TRANSFERS?

  • Benefits to our clients include:
  • Conversion of all known and unknown liabilities into a fixed payment
  • Release of collateral and escrow balances
  • Elimination of Joint and Several Liability for group self-insureds
  • Elimination of potential for additional assessments
  • Potential tax deductibility of loss payments
  • Elimination of administrative costs
  • Improved balance sheet
  • Facilitate the sale of a company or subsidiary

Krauter & Company has the ability and experience to negotiate LPT’s for all lines of coverage. Our brokers analyze our client’s corporate structure and provide NPV and cash flow analyses prior to negotiating this program to enable the client to make a decision that is the most financially advantageous. While the concept of this transaction appears simplistic, the execution is not. At Krauter & Company, our brokers offer creative solutions built upon years of experience building these types of programs.

MORE INFORMATION? CONTACT US.
For more information about Krauter & Company’s Loss Portfolio Transfer capabilities, send your request to: info@krautergroup.com

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