Together we carry the risk

…and reap the rewards

Example – Utilising the Corporate Guarantee risk management fund in your business cycles

Traditionally businesses make use of conventional methods to manage their risks that they have generally considered uninsurable. For example, using retained earnings to cover potential future losses.

The Corporate Guarantee Alternative Risk Transfer product, also known as the Contingency Policy, is an alternative to conventional insurance policies. We assist you in converting risks into sustainable wealth by making use of a risk management fund. Corporate Guarantee also provides a minimum of 20% additional risk transfer on all policies. This risk management fund will offer long and short-term advantages that will give your business a second breath during the downside of your business cycle or in a catastrophic event.

By utilising a risk management fund, companies can build up reserves during profitable periods of business. These funds will then be available to manage their specified risks as well as assist the company during periods where the business potentially experiences losses or difficult economic conditions. The risk management fund can thus smooth out the financial impact of unpredictable events and can assist companies to stabilise their business cycle

Example – Combining Conventional Insurance with Corporate Guarantee

For illustrative purposes, let us say you are currently paying R50 000 per month for your conventional insurance, to cover R6 000 000 worth of risks in your business. You want to start a risk management fund with Corporate Guarantee to assist in managing some specific risks in the future. One way to structure this transition, is to increase your current excess payment and save the difference between your current premium and the new reduced premium by building up your risk management fund with Corporate Guarantee, as shown below:

Current Situation

Risk Covered
R 6 000 000
Conventional Monthly Insurance Premium 1
R 50 000
Current Excess
R 5 000

Corporate Guarantee Combination Alternative

Risk Covered
R 6 000 000
Increase Excess to
R 20 000
Conventional Monthly Insurance Premium 2
R 30 000
Monthly Saving on Conventional Insurance
R 20 000

The annual savings from your conventional insurance premium reduction in the example will amount to R240 000. These funds can then be allocated towards your Corporate Guarantee risk management fund to cover the increased excess payment as well as additional risks in your business.

 *This example is for illustrative purposes only and does not constitute financial advice.

Example – Enhancing the cashflow in your business by utilising our loan facility

Your Corporate Guarantee risk management fund can be pledged as security and you can then loan back up to 90% of the value in your experience account by means of our loan facility. This loan facility can assist your business with cashflow needs that may arise, from time to time. The loan is also granted at very competitive interest rates and can be paid out to you within 24 hours.

The Corporate Guarantee Way

Premium Purchased
R 1 000 000
Administration/Underwriting Fee (eg. 6%)*
R 60 000
Balance of Experience Account
R 940 000
Maximum Loan Amount (90%)
R 846 000

The Traditional Way

Profit
R 1 000 000
Tax (28%)
R (280 000)
Cash available
R 720 000

As can be seen from the example above, by utilising the Corporate Guarantee contingency policy, rather than following the traditional route, you end up in a much better cashflow position. Having access to such a high-quality liquid risk management fund can be invaluable to your business in both the good and the bad times.

*The underwriting fee is based on the risk that is specified on the policy, for illustrative purposes we have assumed an underwriting fee of 6%

*This example is for illustrative purposes only and does not constitute financial advice.

Product focuses on clients with:

  • low claims levels and loss layers which are more predictable,

  • a history of in-house risk management procedures,

  • a risk appetite and ability to finance the self-insurance portion,

  • a sound cash flow and a strong balance sheet.

Example – Utilising the Corporate Guarantee risk management fund in your business cycles

Traditionally businesses make use of conventional methods to manage their risks that they have generally considered uninsurable. For example, using retained earnings to cover potential future losses.

The Corporate Guarantee Alternative Risk Transfer product, also known as the Contingency Policy, is an alternative to conventional insurance policies. We assist you in converting risks into sustainable wealth by making use of a risk management fund. Corporate Guarantee also provides a minimum of 20% additional risk transfer on all policies. This risk management fund will offer long and short-term advantages that will give your business a second breath during the downside of your business cycle or in a catastrophic event.

By utilising a risk management fund, companies can build up reserves during profitable periods of business. These funds will then be available to manage their specified risks as well as assist the company during periods where the business potentially experiences losses or difficult economic conditions. The risk management fund can thus smooth out the financial impact of unpredictable events and assist companies to stabilise their business cycle

Example – Combining Conventional Insurance with Corporate Guarantee

For illustrative purposes, you are currently paying R50 000 per month for your conventional insurance, to cover R6 000 000 worth of risks in your business. You want to start a risk management fund with Corporate Guarantee to assist in managing some specific risks in the future. One way to structure this transition, is to increase your current excess payment and save the difference between your current premium and the new reduced premium by building your risk management fund with Corporate Guarantee, as shown below:

Current Situation

Risk Covered
R 6 000 000
Conventional Monthly Insurance Premium 1
R 50 000
Current Excess
R 5 000

Corporate Guarantee Combination Alternative

Risk Covered
R 6 000 000
Increase Excess to
R 20 000
Conventional Monthly Insurance Premium 2
R 30 000
Monthly Saving on Conventional Insurance
R 20 000

The annual savings from your conventional insurance premium reduction in the example will amount to R240 000. These funds can then be allocated towards your Corporate Guarantee risk management fund to cover the increased excess payment as well as additional risks in your business.

 *This example is for illustrative purposes only and does not constitute financial advice.

Example – Enhancing the cashflow in your business by utilising our loan facility

Your Corporate Guarantee risk management fund can be pledged as security and you can then loan back up to 90% of the value in your experience account by means of our loan facility. This loan facility can assist your business with cashflow needs that may arise, from time to time. The loan is also granted at very competitive interest rates and can be paid out to you within 24 hours.

The Corporate Guarantee Way

Premium Purchased
R 1 000 000
Administration/Underwriting Fee (eg. 6%)*
R 60 000
Balance of Experience Account
R 940 000
Maximum Loan Amount (90%)
R 846 000

The Traditional Way

Profit
R 1 000 000
Tax (28%)
R (280 000)
Cash available
R 720 000

As can be seen from the example above, by utilising the Corporate Guarantee contingency policy, rather than following the traditional route, you end up in a much better cashflow position. Having access to such a high-quality liquid risk management fund can be invaluable to your business in both the good and the bad times.

*The underwriting fee is based on the risk that is specified on the policy, for illustrative purposes we have assumed an underwriting fee of 6%

*This example is for illustrative purposes only and does not constitute financial advice.

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