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Uniquely situated to provide flexible solutions

We partner with strategically aligned organizations to design bespoke insurance, captive, and structured reinsurance solutions, leveraging innovative structures and shared-risk models to address complex and evolving commercial risks.

Alternative Risk-Sharing

(structured deals, captives and fronting)

Nationwide® uses a variety of risk-sharing mechanisms and partnerships to finance coverage solutions for risks that are normally challenging to write. These arrangements take time to develop but have strong retention rates once established. The solutions outlined below are often utilized together to provide a unique solution to individual insureds, further diversifying Nationwide’s capacity. 

Captives

These are often groups with common insurance needs that pool premiums to cover potential losses, with Nationwide providing reinsurance if losses exceed the amount covered.

Fronting

Nationwide writes the direct policy, and through contractual agreements, the risk is transferred to the insured, a captive or an authorized commercial reinsurer for a fee.

Structured deals

Nationwide writes a direct multiyear loss-sensitive solution that tailors coverage to a client’s risk profile, using historical data, risk analysis and creative risk-financing approaches.

Risk scenario

A waste and recycling company operates residential, commercial and industrial refuse collection with landfill and transfer/recycling facilities. Despite the insured having solid operational and risk management controls, this line of business carries inherent auto liability and general liability severity risks.

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The alternative risk-sharing solution

Given the insured’s scale, credit quality and investment in safety, Nationwide recognized that the prior fragmented insurance program did not optimally recognize the insured’s risk management strength or appetite to retain and finance risk over time.

The Nationwide Alternative Risk team designed an integrated solution delivering $9 million of excess liability capacity through 3 coordinated layers. Diversified capacity deployment and risk-sharing serve a different purpose in the client’s overall program.

Nationwide provided a lead excess solution of a 3-year structured layer, creating a framework in which Nationwide and the insured share in performance over time. This helps smooth volatility and align pricing with long-term risk performance instead of a single renewal cycle.

Adding a fronted buffer layer allows the client to retain a portion of risk in a more efficient collateralized retained structure.

Finally, Nationwide placed the upper excess layer through a group captive, allowing the client to share risk with other like-minded insureds in a pooled structure and providing access to underwriting profit and investment income potential. 

Benefits of the solution:
  • A unified $1 million to $10 million tower with a single lead 
  • Budget stability and downside protection 
  • Participation in underwriting profit and investment income  
  • Alignment with insured’s safety and governance 
  • Risk pooling with like-minded fleets 

Risk scenario

Upper-middle-market transportation and fleet-based businesses were facing significant disruption in the excess liability market, especially for auto-exposed layers. Market pricing and available capacity were increasingly driven by broad transportation portfolio performance rather than the individual insured’s own loss history, safety culture and operational discipline. At the same time, many of these insureds had favorable historical results, meaningful investments in safety, and a desire for a more stable and rational excess auto solution.

A traditional annual placement often did not recognize the quality of these risks, while a stand-alone structured excess arrangement was not always efficient for a single upper-middle-market insured because the economics could offer only modest upside in a favorable scenario but meaningful downside in an adverse one. That created the need for a bespoke structure that could pool similar risks, smooth volatility and create a better long-term cost of risk for members seeking excess auto buffer layer protection.

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The alternative risk-sharing solution

Nationwide, working with Ryan Alternative Risk, developed AXSAL as a group captive structure for excess auto liability. The program aggregates qualified upper-middle-market commercial auto accounts into a single member-owned captive model so that members can access a multiyear, loss-sensitive excess solution through a pooled platform instead of relying solely on the conventional market. 

AXSAL is designed to provide excess automobile liability coverage in the buffer layer, combining fronting, reinsurance and captive participation. Policies are issued by Nationwide, then supported through a pure captive owned by its members. This allows the program to replicate the benefits of a 3-year aggregated structure while creating flexibility around premium, assessments and dividends through the captive framework. 

The financial design aligns outcomes between Nationwide, the captive and the insured members. Members pay deposit premium over the policy term and may receive return credits or dividends when individual and group results are favorable. The program also incorporates member capital contributions and shared group adjustments so that the economics reflect both individual performance and pooled results.

Benefits of the solution:
  • Creates a more stable excess auto option for the buffer layer 
  • Better aligns cost of risk with actual member performance 
  • Rewards strong operators over time
  • Spreads volatility more efficiently across similar risks 
  • Supports disciplined underwriting and stronger risk selection 
  • Improves planning, budgeting and long-term financial visibility

Types of risk 

Customized, multiyear prospective treaty reinsurance programs for commercial insurance and large corporate clients are designed to optimize risk transfer, capital efficiency and financial performance.

Applications

Structured property and casualty treaty reinsurance is widely used by insurers and multinational corporations. By combining innovative financial engineering with traditional reinsurance principles, structured reinsurance enables organizations to achieve tailored risk management solutions that support long-term strategic goals.

Strategic flexibility

To meet the diverse needs of our clients, we cover all property and casualty lines of business, including multiline structures combining short and long tail lines of business.

Nationwide’s structured reinsurance solutions cover a range of concepts, such as multiyear excess of loss (XOL), multiyear aggregate XOL, multiyear stop loss, surplus relief quota-share, and of course bespoke solutions.

Policy structure

Nationwide’s structured reinsurance program offers a wide selection of features designed in connection with the client’s risk profile and financial capacity that go beyond traditional risk transfer-driven solutions. Policies are designed with specific financial goals in mind, such as protecting balance sheets, managing volatility or improving key performance.  The program is executed with Ryan Alternative Risk and USQRisk providing underwriting, actuarial, credit and administrative support.

Client motivations

  • To provide surplus relief and capital support for cedents that want to keep meaningful participation in their own results while improving the efficiency of their reinsurance spend
  • To create a bespoke alternative for portfolios that are growing, changing geographically, or carrying characteristics that make a standard off-the-shelf treaty less effective
  • To smooth reinsurance cost over time through a funded and loss-sensitive structure that can include return premium, additional premium and other mechanisms that better align price with actual performance
  • To give both Nationwide and the cedent clearer contractual downside protection through defined thresholds, maximum downside controls and tailored treaty terms 
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