4 MIN READ
Published 07/29/2025
In today’s evolving risk landscape, businesses face a wide range of challenges — from cyber threats and supply chain disruptions to climate events and regulatory changes. While conventional coverage such as general liability, property, and workers compensation can provide a foundation, they may not fully address these complex risks.
That’s why many risk managers are turning to alternative risk solutions (ARS), which offer greater flexibility, control, and tailored coverage to manage today’s diverse risks more effectively.
As Robert Curtis, ARS Practice Leader, Global Risk Solutions at Liberty Mutual Insurance, said: “Alternative risk solutions can help risk managers strike the balance between control and adaptability in their risk management solutions.”
What are alternative risk solutions?
ARS are insurance and risk transfer options tailored to meet specific organizational risks or unique operational requirements that traditional policies may not fully address.
In addition, ARS can enable organizations to build more adaptable risk management programs. Benefits include:
- Flexibility: The ability to tailor coverage based on changing business needs.
- Control: More influence over how risk is financed or managed.
- Capital allocation: More strategic use of funds to align with company priorities.
“As risk managers aim to control and mitigate risks effectively, ARS can help introduce flexibility into risk management strategies, enabling companies to adapt — and even thrive and hold a competitive advantage,” Curtis said.
Which organizations should consider ARS?
Organizations with complex or global risk profiles often gain the most from ARS, including:
- Large enterprises with multiple lines of business.
- Companies operating internationally across diverse regulatory environments.
- Businesses with mature risk management programs seeking to expand their options.
Curtis stated: “International operations are prime candidates due to the variety of risks they face across different jurisdictions and markets.”
Four key types of alternative risk solutions
Alternative risk solutions aren’t one-size-fits-all. Different program types serve different purposes depending on an organization’s size, complexity, and risk appetite. The four main ARS types include:
1. Structured solutions
- Customizable, strategic risk transfer focused on single product line over multiyear agreement.
- Designed to meet a business’s capital needs and adjust to its operating cycles.
- Help manage market volatility and improve capital efficiency.
“These solutions are often very bespoke, meaning they will be tailor-made for the specific organization looking into the structured solution,” Curtis said.
2. Parametric insurance
- Pre-defined objective parameters — such as a specific weather event or cyber incident — trigger coverage.
- The insurer specifies upfront which data will be used to measure and determine payouts.
- Transparent and clearly defined triggers simplify the claims process and speed up payouts.
“Parametric agreements have known triggers built into the coverage, so if the event were to occur, the insured already knows what to expect,” Curtis said.
3. Captives
- Organizations form their own licensed insurance entities to manage certain risks internally.
- More companies are increasingly using this ARS to address emerging risks, including cyber and supply chain disruptions.
Noted Curtis, “Clients are asking, if they are using the captive to insure some of these more prominent risks, is there a different way to buy reinsurance. Here’s where we’re seeing activity as more captive owners look to evolve their captives moving forward.”
4. Integrated solutions
- Combine multiple types of coverage under a shared limit, often as multiyear or multiline arrangements.
- Streamline administration and renewals by consolidating programs
- Can provide more stable capacity over time.
“Instead of buying a separate tower for casualty and financial lines, clients will turn to integrated solutions to buy a shared limit. It turns into a more efficient way of buying capacity and having more stable capacity over time,” Curtis shared.
Key considerations for evaluating ARS options
Choosing the right ARS that aligns with your organization’s unique needs is crucial. Curtis recommends that risk managers focus on three key strategies during the evaluation process:
- Maintain an open mind: Evaluate both traditional and alternative strategies.
- Foster clear communication: Engage with internal stakeholders about the structure, purpose, and value of ARS options.
- Embrace collaboration: Work closely with internal teams and insurance partners to co-develop solutions that fit the organization’s changing needs.
Curtis advised: “Risk managers need to be able to communicate how these programs are going to work internally and the value they bring to the business.”
The role of an ARS provider
Selecting an ARS provider goes beyond price; it also requires experience, local expertise, and a commitment to collaboration.
A strong partner will:
- Listen to a client’s challenges and needs.
- Work with the client to develop a solution that addresses its current risk management needs and environment.
- Stay connected to support the program’s evolution over time.
“By co-creating a solution with a client, we can ensure that the program effectively meets its risk management needs today and evolves as the organization and its needs change. These solutions are designed to be dynamic, so they continue to be relevant and impactful over time,” explained Curtis.
Building resilience through ARS
Alternative risk solutions are one approach among many for organizations facing evolving risks. By understanding available ARS programs and their potential applications, organizations can make informed decisions about managing both familiar and emerging exposures.
Learn more
To explore more about ARS options and risk management strategies, visit https://business.libertymutual.com/alternative-risk-solutions/.
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