Insurance companies that decide to exit the surety
line often desire to make a clean break with the past and fix their
losses once and for all. The ideal vehicle to accomplish this aim is
a Loss Portfolio Transfer (LPT),
through which a company transfers 100% of its losses, known and
unknown, to reinsurers who adjust the claims and settle the losses.
COP has arranged for and managed LPT's ranging from a
few hundred thousand dollars up to tens of millions of dollars of
surety loss. Through its extensive contacts in the surety
reinsurance community, COP is able to attract top quality, A-rated
and Treasury-listed reinsurers who have participated in successful
LPT's managed by COP in the past.
The LPT vehicle caps a company's "downside" at the
premium paid to reinsurers for 100% coverage. At the same time, the
ceding company can still earn an "upside" if losses develop better
than expected. This "upside" feature makes a COP-managed LPT
particularly attractive to companies seeking expeditious closure to
their surety losses.
