Page 67 - RISK Management IC86 Ebook

The Insurance Times

among the risks covered, and thus to reduce risk transfer and
risk capital costs.

In its narrower sense, the risk transfer of exclusively financial,
credit/weather-related or other capital market risks from
capital to insurance markets is structured in the form of a
(re)insurance solution.

This concept is also called "insuratization", which in essence
can be seen as the opposite of insurance securitization,
whereby insurance risks are transferred to capital markets.

Capital markets products - contingent capital

n For several years now the capital market has been offering
contingent capital programmes for debt or equity financing
with insurance event triggers.

These programmes provide additional sources of risk financing
in case of natural catastrophes, and mitigate the impact of'
such catastrophes on insurers' capital.

n The objective is to secure an insurance company's financial
standing in the aftermath of a significant insurance event, when
traditional refinancing would be rather costly, if available .

Website: www.bimabazaar.com Call: 033-22184184 / 40078428 68

Copyright@ The Insurance Times. 09883398055 / 09883380339