Overview
Tokio Marine HCC underwrites Residual Value Guarantees (RVG) for aircraft, commercial real estate and other assets. RVG insurance protects policyholders against unforeseen loss of value of an asset by guarantying a future value. RVG may be used to ensure asset value, to obtain better financing terms or in corporate accounting.
Highlights
- Eliminate lender / investor balloon refinance risk
- Guaranty equity investors a minimum return
- No minimum term
Best for
- Commercial Real Estate Property Owners
- Freight and Passenger Aircraft Owners
- Lessors and Lessees
Summary of coverage
Aircraft and other assets
Eligible aircraft for RVG
- Wide-body, narrow-body and regional jets will be considered
- Concentration on the most popular Airbus and Boeing models
Term of coverage
- No minimum term required
- Length of coverage: 12 years or less
Amount of guaranty
- Typical guaranty: 20% to 40% of current value or 50% to 100% of the projected Ascend Soft Value at risk expiry
- RVG pricing varies depending on the attachment point, amount of insurance and portfolio diversification
Aircraft return conditions
- In compliance with terms contained in the lease, but special conditions can be added
- Typically full-life, but half-life and other conditions are available
Eligible real estate
- Office
- Retail
- Industrial
- Warehouse
Term of coverage
- No minimum term required
- Maximum length of coverage: 30 years
Ownership structures insured
- Upon claim payment, TM HCC must be in a primary lien position
- Insured must be bankruptcy-remote
Amount of guaranty
- Typically, RVG of 25% to 35% of fee simple market value is underwritten, but higher residuals are considered depending on the quality of the assets and structure of the transaction
- RVG premium varies depending on the attachment point and amount of guaranty offered but generally is 4% to 7% of the amount guaranteed
Required property return conditions:
- In compliance with maintenance terms contained in the property lease
- Industry-standard maintenance must be performed during the lease term
- Property must be returned in good and marketable condition
- In compliance with all rules, regulations and laws regarding environmental condition
- Casualty and condemnation insurance is required
Related products
Structured Guaranty Insurance
Tokio Marine HCC will consider opportunities including credit risk, diminution in asset value, legal or other financial risks.
Why choose Tokio Marine HCC?
Tokio Marine HCC is a leading specialty insurance group with offices in the United States, Mexico, the United Kingdom and Europe, transacting business in approximately 180 countries and underwriting more than 100 classes of specialty insurance.
More about us Financial strengthNot all products, coverages, or features may be available in all states. Restrictions, exclusions, limitations, and conditions apply and you should see your agent for more information. Certain products and services are provided through non-admitted insurance carriers and are not subject to certain State Guaranty Funds.