The rise of cell captives: Financing international employee benefits
Explore how cell captives can reduce the time, cost and complexity of standing up a new captive, and could unlock the value of captive financing of international employee benefit arrangements for more organizations.
In an ever-evolving global landscape, multinational employers face unique challenges in managing risk and optimizing life and non-life insurance strategies. The use of captives for employee benefits continues to gain popularity, with more and more organizations choosing to use a captive (often an existing property and casualty captive) to simplify vendor management, improve governance, modernize benefits and minimize cost.
For employers that do not have an existing captive, however, the cost and effort to establish one solely for employee benefits can be hard to justify. This is where we think cell captives can create interesting opportunities.
What you’ll learn in this paper:
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What are cell captives and why use them for employee benefits?Discover what cell captives are and how they can function as a flexible risk financing solution for international employee benefits.
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How could a cell captive be structured for cost efficiency and control?Explore how cell captives can provide greater control over insurance premiums, claims and coverage, and how they could be structured for significant savings.
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When would a cell make sense and what are the key considerations?Use our checklist to see if a cell captive would make sense for your business and explore how to navigate common challenges and solutions when establishing a captive program for employee benefits.
Why reinsure employee benefits to a captive?
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Governance, compliance, and financial riskInternational employee benefits are very localized in nature and for a large multinational operating in multiple countries, the landscape can look complex. The opportunity to consolidate providers under the framework of a captive program can help simplify vendor management, improve governance, and minimize cost.
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Health, well-being, and safety riskOrganizations are investing more in the health of their workforce, and in medical benefits, further increasing the scale of spend to be managed and creating a need for better data to track progress and identify opportunities.
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Environment, sustainability, and protection risksEnsuring equity across the workforce is top of mind for many companies, for example providing access to the right healthcare and protection regardless of geography or seniority. Uplifting benefit programs to plug gaps requires investment and employers are seeking tools to contain these additional costs while keeping cash within the business.
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Talent, leadership, and workforce practices risksIn the midst of economic uncertainty, attracting and retaining the right talent remains a challenge. Differentiating their employment proposition through competitive and unique benefits is key but employers are finding that some insurers are less keen to break from the norm, preferring to maintain coverage in line with traditional local practices (e.g. limiting coverage for mental health or fertility treatment) or applying very conservative pricing. Use of a captive puts more control in the hands of employers to provide the benefits they need to support and engage a more diverse workforce.
The rise of cell captives
is Multinational Financing & Global Mobility Solutions Leader at Mercer Marsh Benefits
is Pooling & Cell Facilities Leader, Captive Solutions at Marsh
is Senior International Consultant at Mercer