Increasing premiums and higher deductibles are the cause of risk managers’ growing use of the alternative risk transfer (ART) market, says the Association of Risk and Insurance Managers of Australasia (ARIMA).

ARIMA President Brad Greer says the trend is a positive move for risk managers because it encourages their organisations to look more closely at their assets and liabilities and foresee certain risks.

He says traditional insurance is no longer as affordable as it was, and organisations should look at implementing sound risk management. He said that identifying, analysing, evaluating, treating and monitoring risks is more important than acquiring traditional forms of insurance.

“Risk managers need to evaluate their businesses so they can determine what level of risk they are willing to absorb, then look at traditional or alternative means of risk transfer,” Mr Greer said.

Captive insurers, self-insurance and other alternative financial products are being increasingly offered by reinsurers, banks and other financial institutions. Risk managers in many large groups are using stop-loss insurance as a form of risk management.