"We target clients who seek to gain more control of their insurance placement and are willing to take a meaningful 'risk-reward' position," says Rob Byler, AAR president and CEO. "What we've seen is both a higher level of interest in the alternative risk transfer (ART) market and a greater percentage of clients looking for an issuing carrier with expertise in this business."

AAR is one of five franchises within the Alea Group of companies, a global reinsurance and specialty insurance company. AAR underwrites for and on behalf of Alea North America Insurance Company, an admitted carrier, and Alea North America Specialty Insurance Company, which has surplus lines authority. Both companies are rated "A-" by A.M. Best and S&P.

"I've been involved in the alternative risk market since 1984 and have seen the business evolve over the years," says Byler. "What's evident is that ART is not just a hard market fix. In fact, I've seen it prosper through hard and soft market cycles, to the extent that several industry sources now cite ART business as comprising nearly half of the U.S. property/casualty market. What's significant is not only the amount of business in the ART market, but also the stability this market segment has shown over time--a clear indication that ART is here for the long term."

Within AAR's key business segments, their ART accounts typically involve some form of risk retention, unbundled services, and the use of an ART vehicle such as self-insurance or a captive. Their insurance programs are designed so that the client can assume risk through a sliding scale commission, instead of an ART vehicle.

"We understood early on that assuming risk and having paper was a key driver, so we went out and bought an insurance company," Byler explains. "We feel that having ability to issue paper and take risk gives us the competitive advantage that most clients are seeking."

AAR's capabilities include primary, excess and reinsurance for alternative risk accounts and programs, as well as insurance programs. AAR focuses primarily on workers compensation, general liability, auto liability and property lines of business, with varying risk retentions and attachment points.

ART and insurance programs are typically $5 million to $20 million in standard premium, are both single and multiline, and regional in nature (with the capability to offer national authority). Insurance programs are primarily homogenous risks for general liability, auto liability and property lines of business and typically limited in geography.