Unfunded Risk Partnership (URP)

Whilst financial institutions represent the most significant insurance buyers in the structured credit and political risks market, there is a significant variation today by country and region.

There are banks that are comfortable with the terms and conditions of a traditional comprehensive non-payment insurance product and banks that face limitations in the capital relief they can realise with such product.

Our diverse, global and specialist team designed the unfunded risk partnership (URP) to overcome any such hurdles and provide an effective risk distribution tool that can deliver economic and/or regulatory capital relief to all financial institutions.

We find opportunities where others see challenges.

WHAT WE DO

Unfunded risk participation

The principle of unfunded risk partnership (URP) is for insurers to be risk partners in every sense with financial institutions such that an institution can be certain of aligned interests in all scenarios.

The partnership concept is designed to ensure an alignment of interest in risk sharing, risk return and information between the financial institution and the partner, as if they were participating pari passu in a transaction. For this reason the terms and conditions of the URP are closer to those of an on-demand guarantee making it a distinct product in the insurance market.

Among other benefits, our URP product also delivers regulatory capital relief to all financial institutions, reduces almost immediately the liquidity shortfall created by a loss, improves the recovery position of the financial institution and contributes to the overall profitability of a transaction.

Unfunded risk participation

URP agreements can be arranged for all the business segments and transaction structures currently insurable in the structured credit and political risk market, for trade related and non-trade related transactions, risks located both in emerging and OECD countries and tenors from under 12 months to 15 years and beyond.

Our URP specialists are based in Paris but are an integrated member of the CPS International network, meaning that the URP can be arranged with local expertise in all regions to suit the preferences of our clients.

Key Stats

360+ airports, authorities and ATC operations
50+ Aerospace product and component manufacturer clients
90+ Aersoapce clients in over 90 countries
80+ Aerospace service providers and MRO operations

WHY JLT

Unfunded risk participation

Clients wishing to use unfunded risk partnership need to ensure that they select a broker with the relevant skills, knowledge and expertise in their business sector. We believe insurance contributes to the growth of your business as well as providing crucial protection in challenging circumstances.

We find opportunities where others see challenges. Our entrepreneurial culture and exclusive analytical ability helps clients to identify and realise opportunity in volatility.

Our multilingual team handle broking services for clients globally including many of the world’s leading corporations, financial institutions and government/multilateral agencies.

As a CPS client you will benefit from:

  • access to a diverse global team to deliver creative, comprehensive risk and insurance solutions which facilitate growth, reduce capital costs, improve returns, secure people and assets
Unfunded risk participation
  • ideas and products that positively impact risk mitigation and risk transfer strategies allowing you to make business decisions with confidence
  • our ability to create capacity to underwrite new and evolving risks
  • proprietary analytical tools to ensure you have access to complete and accurate real-time information which enables fact based decision making
  • experienced resources available where you need them without hierarchical, geography or financial barriers
  • consistent engagement through advisory, structuring, placement and claims, drawing in management leverage and technical expertise to ensure that when losses do occur we maximise recovery and minimize the impact on your operations.

Case Study

International Bank Uses URP

An international bank participating in syndicated transactions with banks that are major users of insurance was struggling to obtain regulatory capital relief from traditional comprehensive non-payment insurance due to its local regulator’s interpretation of the Basel guidelines. We presented the URP concept to the bank as a way to overcome these hurdles.

As part of the on-boarding process, the bank introduced the portfolio of risks it intended to cede and details of its internal procedures and insurers presented their capabilities, risk appetite and experience with the URP. We then negotiated a URP master wording with each risk partner tailored to address the bank’s constraints.

As the relationship with the bank evolves, our team ensures that the partners demonstrate the commercial attitude implied by the URP. The bank can now assign regulatory capital relief to the transactions that are covered by the URP and free up capacity on its most utilised counterparty lines, creating new business opportunities for its clients. 

Claims Capabilities

We deliver results. We deploy all resources to help resolve complex losses and deliver claim payments. Our track record is unblemished.

Our clients have confidence that the insurance policies we arrange for them are expertly structured and written by experienced insurers with strong track records in paying claims. Our approachable brokers work alongside our meticulous CPS claims professionals who specialise in handling, managing and negotiating claims.

In the unfortunate event of a loss:

  • You would have a single point of contact with overall accountability for all losses wherever they occur
  • Our proactive claims handling process would help maximise your recovery under your programme, while minimising the intrusion and interference to your on-going operations
  • We would leverage our strong relationships with the major leaders, loss adjusters and lawyers to help expedite the claims process
  • You would have access to our sophisticated pre-loss consulting and effective post-loss recovery services.

CPS ANALYTICS

Our starting point when structuring a new policy is to precisely understand your needs. Our brokers sit alongside a team of risk analysts drawn from security, technical and academic backgrounds.

Their substantial knowledge is utilised to help us understand the precise nature of your risk profile, thereby assisting us in determining the right insurance solution for your requirements.

Using ground-breaking modelling and rating tools, such as Sunstone and World Risk Review, our analysts can pinpoint risks, map exposures, analyse the risk triggers, and evaluate probable maximum loss (PML) ratios across a portfolio of assets.

Read our latest insightsRead our  latest insights