Alternative Risk Financing Facilities

What Does Alternative Risk Financing Facilities Mean?

Alternative risk financing facilities are private entities that provide risk financing without being official insurance companies. These include captive insurers, risk retention groups, pools, and individual self-insurance. Such entities can offer risk financing for various purposes, including personal or business property, workers’ compensation, medical malpractice coverage, and other forms of financial protection.

Insuranceopedia Explains Alternative Risk Financing Facilities

Alternative risk financing facilities were originally established to address the unmet needs of certain groups and organizations within the insurance market. Over time, these entities have evolved to cater to a wide range of risk financing requirements, including coverage also provided by traditional insurance companies.

A significant number of alternative risk financing facilities are headquartered in Bermuda.