Commercial Waste & Recycling Company
A leading New York City-based commercial waste and recycling company was recently awarded a highly coveted 10-year commercial waste zone contract by New York City, providing unmatched long-term stability and growth potential. In parallel, the company completed the acquisition of another waste and recycling operator, creating additional scale and complexity.
The client approached Union Risk to guide them through the risk management, insurance consolidation, and development of a long-term captive insurance solution.
- Industry: Commercial Waste & Recycling
- Location: New York City
- Annual Revenue: $80 million
- Captive Premium: $3.5 million (Auto Liability & Excess Auto Liability)
- Captive Domicile: U.S.-based
Challenges
- Seamlessly integrate insurance and risk management programs following the acquisition.
- Develop a customized insurance structure that provided stability and long-term financial benefits to match the new contract’s scale.
- Address significant auto liability and excess auto liability exposures with greater control.
Union Risk Services Solution
Union Risk designed and executed a U.S.-domiciled single parent captive structure for the client. Key elements included:
- M&A Risk Management: Union Risk helped facilitate and formalize the insurance programs of both legacy companies ahead of the captive formation.
- Captive Formation & Structuring: We conducted a full feasibility study and regulatory analysis, then led the implementation of the captive, assuming $3.5 million in auto liability and excess auto liability premiums.
- Program Optimization: Designed the captive to optimize underwriting profits, reduce claims volatility, and strengthen overall financial control.
- Ongoing Partnership: We continue to support the client in managing and optimizing their captive strategy for future growth.
Results
- ✔ Underwriting Control & Profitability: The client gained underwriting and claims management control, premium stabilization, and the opportunity to retain underwriting profits.
- ✔ Seamless M&A Integration: Union Risk’s strategic advisory ensured a smooth and efficient M&A integration without disruption to coverage.
- ✔ Enterprise Value Growth: The client projects a 25% to 35% increase in enterprise value over the next five years due to the captive insurance structure and optimized risk financing.
Conclusion
Union Risk’s specialized captive insurance expertise and hands-on leadership throughout the acquisition and captive process positioned our client to not only meet the immediate demands of their new contract but also to enhance enterprise value and long-term financial strength. The captive now serves as a strategic pillar of their ongoing growth and success.
We work closely with our clients' tax, financial, and legal teams to evaluate the information within their portfolio and ensure that any planning concepts are seamlessly integrated into their overall financial landscape.