Journal PostsArchive for May, 2009
[9] Alternative Risk Funding Solutions for Financial Risks - Overview
By Harry Niederau | May 24, 2009
In the master document [3], published in February 2008, we have opened the discussion on insuritization concepts meaning to handle capital market risk. Unlike securitization, which in essence transfers reinsurance type of risk to the capital market by means of retrocession (e.g. cat bonds), insuritization does the opposite. This means it transfers capital market risk to the reinsurance market by means of forward integration. However, in the more general setting of insuritization, reinsurers need not to be of the traditional kind but hedge funds, private equity companies, spv's (special purpose vehicles), etc. may show up as "reinsurers" alike. Within the next couple of months we discuss insuritization of financial risk in a series of three contributions. Part one, to appear shortly, gives a basic motivation of insuritization-based concepts in economic down-cycles while part two sketches an idea of possible insuritization architectures. Part three puts forward a concrete business case elucidating in how far the results of the study in contribution [6] could be exploited in an alternative risk funding context for pensions funds or life insurers. The Feed function, "Journal Posts", in the lower part of the left side-bar may be used in order to be timely informed about updates.
Topics: macro-economics | | Comments