Fleming Re: Innovative Facility For BevCap

December 31, 2020

Fleming Reinsurance Ltd. announced the creation of a custom reinsurance facility with BevCap P&C Protected Cell, Inc, with the facility aiming to provide “BevCap’s members the ability to eliminate seasoned risks by providing full economic and legal finality and on an annual basis.”

A spokesperson said, “The facility provides BevCap’s members the ability to eliminate seasoned risks by providing full economic and legal finality and on an annual basis. Within a single flexible structure, the facility provides for annual recurring novations under a clearly defined mechanism that provides certainty on pricing and transaction timing for group members. This facility will assume BevCap’s Workers Compensation, General Liability, Automobile Liability and Auto Physical Damage liabilities.

“Founded in 2008, BevCap Captive Group [BCCG] is a homogeneous group captive for the beverage distribution industry, specifically designed for its unique needs and exposures. Domiciled in Hawaii, BevCap Captive Group has both Property & Casualty and Health cells.”

Fleming Re CEO, Eric Haller, stated, “Fleming Re continues to focus on providing innovative solutions to the run-off industry that are specifically designed to achieve our counterparty’s goals. Although a facility with recurring transactions is not necessarily a new concept,

“Fleming Re has developed a product with a repeatable algorithm to provide counterparties with unusual pricing certainty for future policy years which in turn provides managers and group members the ability to better optimize their programs. The structure itself creates efficiencies for both parties and will streamline the transaction process in future years. Our structure can be incorporated at the onset of any new captive/entity formation to give counterparties a definitive exit path from their liabilities.”

BevCap commented, “Fleming Re, aware of our leading position in the group captive space, came to us with this novel approach to optimizing our programs, and the benefits to the captive was immediately obvious. Together we were able to develop a solution to meet our goals on legacy liabilities. Fleming’s focus on alignment of interests was key. We look forward to this ongoing relationship with Fleming Re and wouldn’t be surprised to see others in the industry starting to implement similar models.”

Stephen Minor, Fleming Re Chairman, added, “BevCap and the Fleming Re team worked hard to launch a product that delivers an unusual degree of LPT efficiency as well as strong alignment of interest. We believe this structure can be replicated throughout the captive market and is reflective of the direction we and the larger legacy market is headed.”

“BevCap will benefit from an on-going solution that will provide capital releases, full finality and pricing certainty on future run-off transactions. Due to the current market disruption and our reputation as a run-off provider, we are seeing increased demand and will complete several more transactions over the coming months.”

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