CAT Bonds and Other Risk-Linked Securities

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Publisher :
ISBN 13 :
Total Pages : 45 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis CAT Bonds and Other Risk-Linked Securities by : J David Cummins

Download or read book CAT Bonds and Other Risk-Linked Securities written by J David Cummins and published by . This book was released on 2014 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the current status of the market for catastrophic risk (CAT) bonds and other risk-linked securities. CAT bonds and other risk-linked securities are innovative financial vehicles that have an important role to play in financing mega-catastrophes and other types of losses. The vehicles are especially important because they access capital markets directly, exponentially expanding risk-bearing capacity beyond the limited capital held by insurers and reinsurers. The CAT bond market has been growing steadily, with record amounts of risk capital raised in 2005, 2006, and 2007. CAT bond premia relative to expected losses covered by the bonds have declined by more than one-third since 2001. CAT bonds now appear to be priced competitively with conventional catastrophe reinsurance and comparably rated corporate bonds. CAT bonds have grown to the extent that they now play a major role in completing the market for catastrophic risk finance and are spreading to other lines such as automobile insurance, life insurance, and annuities. CAT bonds are not expected to replace reinsurance but to complement the reinsurance market by providing additional risk-bearing capacity. Other innovative financing mechanisms such as risk swaps, industry loss warranties, and sidecars also are expected to continue to play an important role in financing catastrophic risk.

Cat Bonds and Other Risk-Linked Securities

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Publisher :
ISBN 13 :
Total Pages : 22 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Cat Bonds and Other Risk-Linked Securities by : J David Cummins

Download or read book Cat Bonds and Other Risk-Linked Securities written by J David Cummins and published by . This book was released on 2014 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes risk-linked securities as sources of risk capital for the insurance and reinsurance industries. Risk-linked securities are innovative financing devices that enable insurance risk to be sold in capital markets, raising funds that insurers and reinsurers can use to pay claims arising from mega-catastrophes and other loss events. The most prominent type of risk-linked security is the catastrophic risk (CAT) bond, which is a fully collateralized instrument that pays off on the occurrence of a defined catastrophic event. The CAT bond market has expanded significantly in recent years and now seems to have reached critical mass. Nontraditional risk financing instruments, including CAT bonds, industry loss warranties (ILWs), and sidecars, now represent a substantial component of the property catastrophe retrocession market.

The Handbook of Insurance-Linked Securities

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Publisher : John Wiley & Sons
ISBN 13 : 0470685085
Total Pages : 612 pages
Book Rating : 4.4/5 (76 download)

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Book Synopsis The Handbook of Insurance-Linked Securities by : Pauline Barrieu

Download or read book The Handbook of Insurance-Linked Securities written by Pauline Barrieu and published by John Wiley & Sons. This book was released on 2010-06-15 with total page 612 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Luca Albertini and Pauline Barrieu are to be congratulated on this volume. Written in a period where structured projects in finance are having a difficult time, it is worthwhile to return to the cradle of securitisation: insurance. Spread out over three parts (life, non- life, and tax and regulatory issues) the 26 chapters, written mainly by practitioners, give an excellent overview of this challenging field of modern insurance. Methodology and examples nicely go hand in hand. The overall slant being towards actual analyses of concrete products. No doubt this book will become a milestone going forward for actuarial students, researchers, regulators and practitioners alike." —Paul Embrechts, Professor of Mathematics and Director of RiskLab, ETH Zurich The convergence of insurance with the capital markets has opened up an alternative channel for insurers to transfer risk, raise capital and optimize their regulatory reserves as well as offering institutions a source of relatively liquid investment with limited correlation with other exposures. One of the financial instruments allowing for the cession of insurance-related risks to the capital markets is Insurance-Linked Securities (ILS). This book provides hands-on information essential for market participants, drawing on the insights and expertise of an impressive team of international market players, representing the various aspects and perspectives of this growing sector. The book presents the state of the art in Insurance-Linked Securitization, by exploring the various roles for the different parties involved in the transactions, the motivation for the transaction sponsors, the potential inherent pitfalls, the latest developments and transaction structures and the key challenges faced by the market. The book is organized into parts, each covering a specific topic or sector of the market. After a general overview of the ILS market, the Insurance-Linked Securitization process is studied in detail. A distinction is made between non-life and life securitization, due to the specificities of each sector. The process and all the actors involved are identified and considered in a comprehensive and systematic way. The concepts are first looked at in a general way, before the analysis of relevant case studies where the ILS technology is applied. Particular focus is given to: the key stages in both non-life and life securitizations, including the general features of the transactions, the cedant's perspectives, the legal issues, the rating methodologies, the choice of an appropriate trigger and the risk modeling, the particular challenges related to longevity securitization, the investor's perspective and the question of the management of a portfolio of ILS, the general issues related to insurance-linked securitization, such as accounting and tax issues, regulatory issues and solvency capital requirements. The book is accompanied by a website www.wiley.com/go/albertini_barrieu_ILS which will feature updates and additions to the various contributions to follow market developments.

Catastrophe Risk Financing in Developing Countries

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Publisher : World Bank Publications
ISBN 13 : 0821377361
Total Pages : 299 pages
Book Rating : 4.8/5 (213 download)

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Book Synopsis Catastrophe Risk Financing in Developing Countries by : J. David Cummins

Download or read book Catastrophe Risk Financing in Developing Countries written by J. David Cummins and published by World Bank Publications. This book was released on 2009 with total page 299 pages. Available in PDF, EPUB and Kindle. Book excerpt: 'Catastrophe Risk Financing in Developing Countries' provides a detailed analysis of the imperfections and inefficiencies that impede the emergence of competitive catastrophe risk markets in developing countries. The book demonstrates how donors and international financial institutions can assist governments in middle- and low-income countries in promoting effective and affordable catastrophe risk financing solutions. The authors present guiding principles on how and when governments, with assistance from donors and international financial institutions, should intervene in catastrophe insurance markets. They also identify key activities to be undertaken by donors and institutions that would allow middle- and low-income countries to develop competitive and cost-effective catastrophe risk financing strategies at both the macro (government) and micro (household) levels. These principles and activities are expected to inform good practices and ensure desirable results in catastrophe insurance projects. 'Catastrophe Risk Financing in Developing Countries' offers valuable advice and guidelines to policy makers and insurance practitioners involved in the development of catastrophe insurance programs in developing countries.

Investing in Insurance Risk

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Publisher :
ISBN 13 : 9781904339564
Total Pages : 480 pages
Book Rating : 4.3/5 (395 download)

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Book Synopsis Investing in Insurance Risk by : Alex Krutov

Download or read book Investing in Insurance Risk written by Alex Krutov and published by . This book was released on 2010 with total page 480 pages. Available in PDF, EPUB and Kindle. Book excerpt: Information on the types of these securities and the issues involved in their structuring, pricing, trading, and managing on a portfolio basis.

Cat Bonds

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Publisher : Independently Published
ISBN 13 :
Total Pages : 94 pages
Book Rating : 4.5/5 (668 download)

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Book Synopsis Cat Bonds by : Florian Steiger

Download or read book Cat Bonds written by Florian Steiger and published by Independently Published. This book was released on 2020-11-30 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt: Investors across the globe are struggling to generate returns in a world of sub-zero interest rates. Macroeconomic events have the potential to shock financial markets from equities to corporate or government bonds alike. The traditional methods of portfolio diversification are failing in a world characterized by unprecedented liquidity injections from central banks. Cat bonds offer a viable alternative: Their performance is linked to the occurrence of natural catastrophes, such as hurricanes or earthquakes, instead of corporate profits or stock market sentiment. Family offices and leading institutional investors are shifting billions of assets into these little-known instruments thus effectively becoming competitors to the traditional providers of reinsurance coverage. With steady returns of more than 7% per annum over the past twenty years, cat bonds have proven their resilience many times. This book takes the reader through the history of the asset class, outlines the basic structure and economics before demonstrating the benefit of adding a cat bond allocation to a traditional multi-asset portfolio.

Insurance Linked Securities

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Publisher : Springer Science & Business Media
ISBN 13 : 3834967882
Total Pages : 367 pages
Book Rating : 4.8/5 (349 download)

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Book Synopsis Insurance Linked Securities by : Christoph Weber

Download or read book Insurance Linked Securities written by Christoph Weber and published by Springer Science & Business Media. This book was released on 2011-06-28 with total page 367 pages. Available in PDF, EPUB and Kindle. Book excerpt: Securitisations of insurance risk as new methods of risk transfer have been emerging in the global financial market during the recent twenty years. Christoph Weber analyses the techniques of traditional methods in comparison with securitisations for life- and non-life insurance risk.

The Financing of Catastrophe Risk

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Publisher : University of Chicago Press
ISBN 13 : 0226266257
Total Pages : 490 pages
Book Rating : 4.2/5 (262 download)

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Book Synopsis The Financing of Catastrophe Risk by : Kenneth A. Froot

Download or read book The Financing of Catastrophe Risk written by Kenneth A. Froot and published by University of Chicago Press. This book was released on 2007-12-01 with total page 490 pages. Available in PDF, EPUB and Kindle. Book excerpt: Is it possible that the insurance and reinsurance industries cannot handle a major catastrophe? Ten years ago, the notion that the overall cost of a single catastrophic event might exceed $10 billion was unthinkable. With ever increasing property-casualty risks and unabated growth in hazard-prone areas, insurers and reinsurers now envision the possibility of disaster losses of $50 to $100 billion in the United States. Against this backdrop, the capitalization of the insurance and reinsurance industries has become a crucial concern. While it remains unlikely that a single event might entirely bankrupt these industries, a big catastrophe could place firms under severe stress, jeopardizing both policy holders and investors and causing profound ripple effects throughout the U.S. economy. The Financing of Catastrophe Risk assembles an impressive roster of experts from academia and industry to explore the disturbing yet realistic assumption that a large catastrophic event is inevitable. The essays offer tangible means of both reassessing and raising the level of preparedness throughout the insurance and reinsurance industries.

Alternative Risk Strategies

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Publisher : Bharat Book Bureau
ISBN 13 : 9781899332632
Total Pages : 684 pages
Book Rating : 4.3/5 (326 download)

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Book Synopsis Alternative Risk Strategies by : Morton Lane

Download or read book Alternative Risk Strategies written by Morton Lane and published by Bharat Book Bureau. This book was released on 2002 with total page 684 pages. Available in PDF, EPUB and Kindle. Book excerpt: A ground-breaking volume that fully exposes the relatively new area of risk financing from traditional methods of insurance and provides analysis of the intersection of insurance and finance. \r\nKulp-Wright Book Award winner 2002 - Nominated "Runner-Up" by the American Risk and Insurance Association (ARIA)

Routledge Handbook of Sustainable and Resilient Infrastructure

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Publisher : Routledge
ISBN 13 : 135139276X
Total Pages : 1214 pages
Book Rating : 4.3/5 (513 download)

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Book Synopsis Routledge Handbook of Sustainable and Resilient Infrastructure by : Paolo Gardoni

Download or read book Routledge Handbook of Sustainable and Resilient Infrastructure written by Paolo Gardoni and published by Routledge. This book was released on 2018-12-17 with total page 1214 pages. Available in PDF, EPUB and Kindle. Book excerpt: To best serve current and future generations, infrastructure needs to be resilient to the changing world while using limited resources in a sustainable manner. Research on and funding towards sustainability and resilience are growing rapidly, and significant research is being carried out at a number of institutions and centers worldwide. This handbook brings together current research on sustainable and resilient infrastructure and, in particular, stresses the fundamental nexus between sustainability and resilience. It aims to coalesce work from a large and diverse group of contributors across a wide range of disciplines including engineering, technology and informatics, urban planning, public policy, economics, and finance. Not only does it present a theoretical formulation of sustainability and resilience but it also demonstrates how these ideals can be realized in practice. This work will provide a reference text to students and scholars of a number of disciplines.

The Challenges of Catastrophe Risk Management: Empirical Analyses in the CAT Bond Market

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Publisher : Cuvillier Verlag
ISBN 13 : 3736963785
Total Pages : 194 pages
Book Rating : 4.7/5 (369 download)

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Book Synopsis The Challenges of Catastrophe Risk Management: Empirical Analyses in the CAT Bond Market by : Tobias Götze

Download or read book The Challenges of Catastrophe Risk Management: Empirical Analyses in the CAT Bond Market written by Tobias Götze and published by Cuvillier Verlag. This book was released on 2021-03-22 with total page 194 pages. Available in PDF, EPUB and Kindle. Book excerpt: Due to the increasing relevance of natural catastrophes as a significant global source of risk and the capacity constraints in primary insurance and reinsurance markets, CAT bonds have become an important instrument to manage catastrophe risks by transferring them to the capital market. In three empirical studies, this dissertation examines the challenges related to catastrophe risk management with CAT bonds. First, the factors that influence the substitution of traditional reinsurance by CAT bonds are identified. These factors consist of the insured risk layer and the extends of reinsurer default risk, basis risk, and asymmetric information. Second, the accessibility of the CAT bond market for (re)insurance companies is analyzed and the results exhibit the existence of barriers to market entry in the form of higher premiums being paid by less reputable and financially weaker CAT bond sponsors. The third empirical study shows that CAT bond sponsors are susceptible to moral hazard, but also that moral hazard can be successfully prevented by sufficient loss retention or by the use of non-indemnity CAT bonds. Altogether, this dissertation contributes to improving the understanding of the CAT bond market and the challenges of catastrophe risk management using CAT bonds.

Non-Life Insurance-Linked Securities: Risk and Pricing Analysis

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Publisher : VVW GmbH
ISBN 13 : 3899528387
Total Pages : 316 pages
Book Rating : 4.8/5 (995 download)

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Book Synopsis Non-Life Insurance-Linked Securities: Risk and Pricing Analysis by : Thomas Nowak

Download or read book Non-Life Insurance-Linked Securities: Risk and Pricing Analysis written by Thomas Nowak and published by VVW GmbH. This book was released on 2014-09-25 with total page 316 pages. Available in PDF, EPUB and Kindle. Book excerpt: Unter Insurance-Linked Securities (ILS) versteht man innovative Finanzprodukte, welche Versicherungsrisiken aus den eng abgegrenzten Märkten der Erst- und Rückversicherungswirtschaft herauslösen und mittels Verbriefung auf Kapitalmärkten handelbar machen. Durch ILS erhalten Investoren die Möglichkeit, für die Bereitstellung von Deckungskapital in Versicherungsrisiken zu investieren und im Gegenzug eine Versicherungsprämie zu erhalten. Hierbei verfolgt das Werk zwei Ziele. Zum Einen, die Durchführung einer genauen Analyse der zugrunde liegenden Zahlungsströme, der beworbenen Eigenschaften und jener Risiken, welche mit einer Investition in ILS verbunden sind. Zum Anderen, die Überprüfung der Anwendbarkeit und Passgenauigkeit vorgeschlagener versicherungsmathematischer und marktorientierter Bewertungsverfahren für ILS sowie die Unterbreitung möglicher Vorschläge für Bewertungsverfahren. Da ILS regelmäßig dazu verwendet werden Extremrisiken zu verbriefen, werden beide Untersuchungen unter expliziter Berücksichtigung der statistischen Eigenschaften von Extremrisiken durchgeführt. Im Ergebnis lässt sich festhalten, dass ILS Investitionen mit eigenen Spezifika darstellen. Investoren sollten diese kennen und berücksichtigen. Dies gilt gerade vor dem Hintergrund der stetig steigenden Zahl von ILS, welche insbesondere in den Zeiten der Niedrigzinsphase als attraktives Investment gesehen werden. Das Buch richtet sich an Investoren und Interessierte, die sich über ILS als Investitionen und deren Bewertung informieren möchten.

Assessing the Enabling Environment for Disaster Risk Financing

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Publisher : Asian Development Bank
ISBN 13 : 9292622668
Total Pages : 93 pages
Book Rating : 4.2/5 (926 download)

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Book Synopsis Assessing the Enabling Environment for Disaster Risk Financing by : Asian Development Bank

Download or read book Assessing the Enabling Environment for Disaster Risk Financing written by Asian Development Bank and published by Asian Development Bank. This book was released on 2020-06-01 with total page 93 pages. Available in PDF, EPUB and Kindle. Book excerpt: Disasters damage and destroy infrastructure and disrupt economic activities and services, potentially delaying long-term development and hampering efforts to reduce poverty in the region. Countries require a strong enabling environment for disaster risk financing to ensure the timely availability of post-disaster funding. This report presents a comprehensive diagnostics tool kit that countries can apply to assess the financial management of disaster risk. The framework examines the state of the enabling environment and provides a basis to enhance financial resilience with insurance and other risk transfer instruments. It incorporates lessons from the country diagnostics assessments for Fiji, Nepal, Pakistan, and Sri Lanka that made use of the tool kit and methodology.

Catastrophe Bonds, Spreading Risk

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Publisher :
ISBN 13 :
Total Pages : 288 pages
Book Rating : 4.3/5 (91 download)

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Book Synopsis Catastrophe Bonds, Spreading Risk by : United States. Congress. House. Committee on Financial Services. Subcommittee on Oversight and Investigations

Download or read book Catastrophe Bonds, Spreading Risk written by United States. Congress. House. Committee on Financial Services. Subcommittee on Oversight and Investigations and published by . This book was released on 2002 with total page 288 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Determinants of the Cat Bond Issuance Spread

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Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (774 download)

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Book Synopsis Determinants of the Cat Bond Issuance Spread by : Nico Gysi

Download or read book Determinants of the Cat Bond Issuance Spread written by Nico Gysi and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the insurance industry was struck by unprecedented high insurance losses caused by natural catastrophes in the early 1990s, the risk perspective of insurance and reinsurance companies regarding the handling of natural disaster risk has changed completely. The industry's ultimate desire to transfer a share of its risk to the capital markets has led to a continuous convergence of insurance and financial markets over the last two decades and the creation of a new asset class: insurance-linked securities. Catastrophe bonds have developed into the most successful instruments to help insurers and reinsurers to control their exposure to natural disaster risk and provided attractive investment options for investors. This paper provides an overview of the cat bond market's evolution, its current role and growth potential within the reinsurance market as well as a recap of previously conducted cat bond studies. The paper's focus is set on the analysis of the cat bond spread's determinants at the time of issuance. The analysis is based on a data sample of more than 300 cat bond transactions between 1997 and 2010 and was conducted using several multiple regression models, which identified the following factors as the key drivers of the cat bond issuance spread: expected loss, trigger structure, bond rating, peril type and the state of the underwriting cycle. The expected loss has the greatest impact on the spread level, with a spread to expected loss multiple of slightly over two. In contrast to findings of previous studies, indemnity trigger structures do not reward investors with higher premium spreads. Instead, the presence of an indemnity trigger structure decreases the cat bond spread by 62 bps. Ratings affect the spread level as expected. The higher the rating is, the lower is the cat bond spread. With regard to the different perils covered by cat bonds, the findings indicate that the spread level is highly sensitive to the cover.

Using Catastrophe-linked Securities to Diversity Insurance Risk

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Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (535 download)

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Book Synopsis Using Catastrophe-linked Securities to Diversity Insurance Risk by : Henri Loubergé

Download or read book Using Catastrophe-linked Securities to Diversity Insurance Risk written by Henri Loubergé and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Using Catastrophe-linked Securities to Diversify Insurance Risk

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Author :
Publisher :
ISBN 13 :
Total Pages : 10 pages
Book Rating : 4.:/5 (717 download)

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Book Synopsis Using Catastrophe-linked Securities to Diversify Insurance Risk by : Henri Loubergé

Download or read book Using Catastrophe-linked Securities to Diversify Insurance Risk written by Henri Loubergé and published by . This book was released on 1999 with total page 10 pages. Available in PDF, EPUB and Kindle. Book excerpt: