At the heart of Euroguard is our ability to offer clients an equity participation in our shareholding structure. Modelled like a honeycomb, there are 50 separate classes of shares and each class defines a unique protected cell. MMI Holdings (UK) Limited provides the sponsoring capital by way of voting ordinary shares. Preference shares are issued to clients wishing to participate in the structured insurance programmes that we offer.
On implementation of a structured insurance programme, the protected cell owner purchases a unique class of preference shares in Euroguard. Each share block comprises a distinct class of non-voting preference share carrying a dividend entitlement related to the insurance business of that particular protected cell.
The shares issued to cell owners provide the capacity to write business, ensuring the necessary solvency requirements are maintained. In the first year, the solvency is supported by the share capital and share premium provided by the cell owner but in subsequent years, the retained profits of each protected cell can also be used to support the solvency requirements. Retained profits can be returned back to the cell owner by way of dividends or they can be used to retain greater risk within the protected cell for the direct benefit of the cell owner and associated policyholders of the specific insurance programme.