A new business unit has been set up by insurance giant ACE Limited to capitalise on the risk financing needs of international corporations.

Bermuda-based ACE announced yesterday that the unit - named ACE Risk Management International - will support its offices around the globe with structuring and implementing captive and rent-a-captive programmes and other risk-financing alternatives for major corporate clients.

The company said ACE Risk Management International's business focus would be on major, non-US corporations with dedicated resources already established in Bermuda, Germany and the United Kingdom. ACE said that with its global platform - the company has operations in nearly 50 countries around the world - the new unit could move into other countries or regions as business developed and need dictated.

ACE veteran Roger Gillett, with more than 30 years of experience in the insurance industry, has been named to head the new unit as president.

Mr. Gillett has spent the bulk of his career working in the area of alternative risk transfer. Most recently, he held the position of executive vice-president, business development at ACE Bermuda.

Mr. Gillett told The Royal Gazette that he would continue to be based in Bermuda as many of the alternative risk transfer techniques and products were developed in and are available from Bermuda.

Although stepping away from his former position as head of business development for ACE Bermuda, Mr. Gillett said he would continue to be involved on the rent-a-captive side of the business as that fits into his new role. Mr. Gillett will report directly to ACE Overseas General CEO Gary Schmalzriedt.

Meanwhile, Mr. Schmalzriedt said in a company issued press release, that the move to set up ACE Risk Management International followed recent research conducted by the company involving extensive interviews with brokers and clients, as well as an assessment of the capabilities of current providers in the market.

From this research, he said, it was concluded that there was a strong trend towards the greater use of captives and other alternative risk financing structures.

"ACE's commitment to long-term partnerships with our clients, our global network and our team approach, ideally positions ACE Risk Management International to fill the current risk financing needs in the marketplace.

"The research participants also told us that an expansion of ACE's activities in this area would be welcomed," Mr. Schmalzreidt said.

He added: "Under the skilled direction of Roger Gillett, the unit will further enhance our leadership position in the global marketplace and enable us to provide superior customised solutions to non-US corporations.

"In particular, we will focus on working closely with our clients' captives to enhance their effectiveness using our extensive global presence."

Mr. Gillett said that given ACE's global platform, the new unit will be able "to marshall resources that already exist to make the products and services that ACE has been quietly providing through the years available to non-US corporations."

He added that research had identified an "unmet need" which the company saw as a "major opportunity to offer alternative risk transfer techniques globally."

Mr. Gillett attributed the increased interest in alternative risk models to corporations looking for ways to better manage their risk requirements in a hard insurance market where coverage may come with a higher price tag and be subject to tighter terms and conditions.

"In addition, the level of insurance required by some corporations may not always be available as some insurers have scaled back on certain lines.

"The hard insurance market has meant that some companies have been forced, or are electing, because of pricing to take larger retentions.

"In addition, a number of (insurance) companies have, for whatever reason, scaled back on their activities.

"It is supply and demand and we see an opportunity to fulfill the unmet needs of clients," Mr. Gillett said.

Mr. Gillett added that alternative risk financing was multi-dimensional in its approach, and could be a progressive way for a company to adapt in the current market. ACE already offered risk financing alternatives within the North American market through its US-based operations.