01.Core Concepts

Some insurers use the capital markets as an alternative to traditional reinsurance Securitization of risk means that an insurable risk is transferred to the capital markets through the creation of a financial instrument, such as a catastrophe bond or futures contract Catastrophe bonds are corporate bonds that permit the issuer of the bond to skip or reduce the interest payments if a catastrophic loss occurs Catastrophe bonds are growing in importance and are now considered by many to be a standard supplement to traditional reinsurance.