At Fenix, we specialize in risk analysis and program design that dovetails with commercial insurance placements, and more importantly, a client’s enterprise risk management (“ERM”) approach.

The success of a captive is closely linked to the sponsor company’s approach to risk management. We would encourage all sponsors to consider a captive insurance company as an integral part of their overall risk philosophy and dovetail captive tools to risk management needs.

ERM offers a holistic approach to risk. It looks at risk on an enterprise-wide basis. The ERM process looks to identify risks within and external to the organizations. Those risks may include such things as:

Hazard

  • Liability Torts
  • Property Damage
  • Natural Catastrophe

Financial

  • Pricing Risk
  • Asset Risk
  • Currency Risk
  • Liquidity Risk

Operational

  • Customer Satisfaction
  • Product Failure
  • Integrity
  • Reputational Risk

Internal

  • Poaching
  • Knowledge Drain

Strategic

  • Competition
  • Social trend
  • Capital Availability

By considering such risk areas an organization can then identify, evaluate, and consider control mechanisms for their exposures, or methods by which a company can exploit its opportunities.

We recognize that ERM, especially within a small and medium-sized enterprise (SME’s) can be informal and fluid. We look to work to accommodate a client’s ERM approach.

Whilst larger companies can have inbuilt risk diversification by way of size, SMEs tend to lack the ability to sustain loss directly from cash flow.

For certain risks, a better approach may be for a company to share the risk with other similar entities to spread the risk. One way to do that is with the use of a captive insurance company and the utilization of a risk pool.

Fenix operates a risk exchange facility that pools certain of our captive clients’ insurance risks to enhance the ERM framework.