Eastern Alliance Insurance Group Review - History of Captives

Eastern, Inova, and alternative insurance. A history of security and stability.

The concept of alternative insurance, commonly known as “captives,” has been around as long as insurance itself.1 The idea dates back to the 1600s when ship owners sat down at Lloyd’s Coffee House in London to discuss common sense solutions to protecting their vessels and cargo from financial loss. The rest is “Lloyd’s of London” history.

The modern day “captive” was born in 1958 by insurance innovator Fred Reiss, when he formed a “self-insurance” company to insulate his first client from the insecurities and instabilities of traditional insurance. As a wholly owned subsidiary located in Bermuda, this insurance company was literally a “captive” of the parent.

In recent decades, captives’ inherent security and stability have garnered widespread global acceptance and popularity. More than 90% of Fortune 500 companies have one or more captives. The ever-evolving sophistication of captives makes them attractive solutions for organizations of all types and sizes in search of an alternative to traditional insurance.

Eastern and Inova. True leadership in alternative insurance.

Inova's leadership in alternative insurance began in March 1998 when Cayman-based Eastern Re Ltd. became the first Segregated Portfolio Company (SPC) authorized by the Cayman Island Monetary Authority (CIMA). An SPC is a single legal entity comprised of individual “protected cells” that protect each insured organization’s assets and liabilities within a secure, stable environment.

Inova’s Eastern Re was the first SPC to be assigned a financial strength rating by A.M. Best Company. On August 13, 2014, A.M. Best Company reaffirmed Eastern Re’s A (Excellent) financial strength rating.

Inova's strength is reinforced by Eastern’s solid partnerships with globally respected industry leaders, including Lloyd’s of London (insurer/reinsurer), Global Captive Management Ltd. (insurance manager), Ernst & Young LLP (actuary/auditor), and Deustche Bank (SPC investment manager).

As of December 31, 2014, Inova includes 20 active programs totaling in excess of $60M in direct written premium.

1 Shanique Hall, “Recent Developments in the Captive Insurance Industry,” Center for Insurance Policy Research (CIPR) Newsletter [January 2012], accessed February 7, 2014.