What does alternative market mean?

alternative market meaning in Insurance Dictionary

A term widely used in risk financing to mention to a single of lots of threat funding strategies (age.g., self-insurance, captive) or facilities (e.g., ACE, XL) that provide coverages or services away from realm of the provided by many standard property-casualty (P&C) insurers. The alternative marketplace could be utilized by huge corporations, for example, to give high restrictions of coverage over a sizable self-insured retention (SIR), or by smaller organizations taking part in a risk retention group (RRG) or group captive program. Keep in mind that the distinction between old-fashioned and alternate areas sometimes blur over time as numerous old-fashioned insurers expand their particular offering of items to encompass alternative-type funding practices and the other way around. Also, retrospective score plans, specifically compensated reduction programs, are often identified using alternate market.