Loss Ratio on Insurance Equity Securities: A New Step in Insurance Securitization

Abstract

The recent trend of integrated risk management has resulted in corporations reassessing their risk management practices. Insurance derivatives and insurance‐linked securities are emerging as alternatives or complements to traditional resisurance capacity. Despite its theoretical benefits, the market for insurance‐linked transactions has not matured, due to problems of information asymmetry and lack of transparency. This article proposes a solution to resolve the conflicting interests preventing insurers/reinsurers and investors from more widely trading insurance risk.

Citation

BOURIAUX, S. and RUSSELL, D.T. (2002), "Loss Ratio on Insurance Equity Securities: A New Step in Insurance Securitization", Journal of Risk Finance, Vol. 3 No. 4, pp. 73-82. https://doi.org/10.1108/eb043501