Lidwala Insurance's Cell Concept explained

The Cell Concept

At the heart of solution is Lidwala Insurance´s ability to enable clients to insure their predictable risk through an equity participation in Lidwala Insurance known as a "cell". By virtue of their participation in Lidwala Insurance, clients have access to the benefits enjoyed by short-term insurers.

Risks Ideal for the "Cell Concept"

All classes of insurance business i.e fire, engineering, motor, liabilities, bonds and marine can be customized along the rent a cell structure and is mainly ideal for fairly medium to large organizations, local government authorities, organized groups and parastatals who might want to reduce the cost of conventional insurance by retaining part of the risk and re-insuring only the potentially catastrophic part of the risk.

Motivation for Self Insurance

On the conventional market interest earned on the funds accrue to the insurer, whereas in the self-insurance arrangement interest plus the capital amount injected in the fund accrues to the cell holder.
On the conventional market wholesale rating ignores good loss experience and there is usually volatility of insurance prices. With self-insurance premiums are determined by the company's loss experience rather than that of the peer group whose experience can be higher.

Some of the advantages for participating in Lidwala's "cell"

By virtue of their participation in Lidwala Insurance company clients have access to a range of benefits enjoyed by short-term insurers:

Underwriting profits or performance bonuses
Investment income
Client is involved in the investment decision of the fund
Client's fund is secured through the issuance of preferential shareholders agreement
Product is customised
Decreased administration costs
Flexible tax treatment
Access to reinsurance markets
Access to international risk financing structures

Risks Ideal For The "Cell Concept"

Specialised and expensive to insure risks - there are other type of insurance products that are either unavailable on the conventional market or if available will be very expensive to insure conventionally. These type of risks can qualify under the cell structure as it can be tailor made to meet customer needs. Examples of such risks are environmental (pollution) liabilities for mining and industrial firms, umbrella liabilities, professional indemnity, directors & officer's liability, excess buy back and difference in condition covers amongst a wide range of specialized insurance products.