What Does Alternative Market Mean?

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What does Alternative Market mean? Read on to discover the definition & meaning of the term Alternative Market - to help you better understand the language used in insurance policies.

Alternative Market

Alternative Market

A term commonly used in risk financing to refer to one of a number of risk funding techniques (e.g., self-insurance, captive) or facilities (e.g., ACE, XL) that provide coverages or services outside the realm of that provided by most traditional property-casualty (P&C) insurers. The alternative market may be utilized by large corporations, for example, to provide high limits of coverage over a large self-insured retention (SIR), or by smaller entities participating in a risk retention group (RRG) or group captive program. Note that the distinction between traditional and alternative markets tends to blur over time as many traditional insurers expand their offering of products to encompass alternative-type funding techniques and vice versa. Also, retrospective rating plans, especially paid loss plans, are sometimes identified with the alternative market.

We hope the you have a better understanding of the meaning of Alternative Market.

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