Synergy targets £50k-£1m target premiums with micro-captive launch

Synergy Insurance Services UK the new insurance venture led by City financier Sir Mark Weinberg, has announced the launch of Synergy MicroCaptive.

Synergy MicroCaptive adapts and simplifies the captive concept used by large corporations to turn it into a product which looks and feels much more like traditional insurance, but with many of the benefits of a captive.

In this way, it can be used by businesses with an annual insurance spend of between £50k and £1m.

Synergy MicroCaptive manages major business insurances via a single policy, eliminating many of the administrative costs created by the insurance system. In addition, 30-40% of the annual net premium is allocated to an interest bearing account in the client’s name to cover smaller losses so, if a business manages its risks well and has low - or no - small claims, it gets the money in the account back.

This captive and insurance backed product structure also results in lower exposure to insurance premium tax for businesses.

Synergy has signed a deal with specialist business insurer Inter Hannover to underwrite Synergy MicroCaptive. Inter Hannover, the primary insurance arm of Hannover Re, one of the leading global reinsurance groups, confirmed its commitment to Synergy by entering into a five year partnership to launch Synergy MicroCaptive and also collaborate on a pipeline of forthcoming initiatives.

Synergy MicroCaptive will initially be marketed by a small network of founder brokers including Smart & Cook. Brokers were selected for their shared enthusiasm for the product, geographical spread and attention to service needed to deliver the Synergy MicroCaptive value proposition.

Synergy plans to launch its product to the wider broker market during 2007. Synergy Insurance Services Ltd is backed by some of the most respected names in the insurance industry – including Sir Mark Weinberg, founder of Allied Dunbar Assurance (now part of Zurich Financial Services) and co-founder of St James’s Place Wealth Management Group, who is the Chairman and a substantial investor.

Sir Mark said: “The commercial insurance world is not traditionally a hotbed of creativity and we think this is the first genuinely new idea for over a decade. With Synergy MicroCaptive, insurance does what it should do; that is to solve problems that might otherwise put companies in jeopardy, while not meddling in the small matters that are better dealt with by the businesses themselves.

“For the first time ever insurance companies and businesses are in perfect alignment – with common goal of managing risks effectively and driving costs down. I have spoken to many brokers and potential customers and these conversations demonstrate an overwhelmingly positive market response so I’m confident about its long term prospects in the market,” he added.

Paul Meehan, CEO of Smart & Cook added: “This innovative scheme makes available to medium sized businesses benefits previously enjoyed only by the larger companies. By bringing the captive concept to the commercial sector, Synergy allows individual businesses who control their own risk to enjoy the benefits regardless of market conditions.”