This document provides an overview of cat bonds, which offer an alternative capacity source for natural catastrophe insurance. Cat bonds transfer catastrophe risk to the capital markets through securitization. Since 1997, 141 cat bonds have been issued totaling $27 billion in risk limits. The market started growing significantly after major hurricanes and earthquakes in the 1990s. Investor interest continues to rise due to attractive yields and increased understanding of natural catastrophe risk. Cat bonds and other insurance-linked securities may prove useful for risk management in China and other parts of Asia in the future.
This presentation provides readers with an introduction to bonds and their many characteristics. Topics discussed such as types of bonds, bond trading, valuing bonds and much more are highlighted in this presentation and can be further discussed on our site www.finpipe.com.
This document discusses traditional and alternative insurance options for catastrophe risks such as hurricanes, earthquakes, and floods. It provides details on:
- Traditional reinsurance and its limitations in fully meeting coverage demands, leading to the growth of alternative options like catastrophe (CAT) bonds.
- How CAT bonds work, including being issued by a special purpose vehicle to provide reinsurance coverage to primary insurers and allow access to capital markets.
- The components and uses of CAT models, which are computer simulations used to analyze catastrophe risk and loss exposures in property portfolios. CAT models help price coverage and allocate capital.
- Key considerations for primary insurers in deciding between traditional reinsurance or CAT bonds to transfer catastrophe
This document discusses securitization, which involves pooling various types of loan assets and converting them into marketable securities. The securitization process involves an originator selecting and packaging loan assets, which are then sold to a special purpose vehicle (SPV). The SPV then converts the assets into securities and sells them to investors. Various players are involved, including originators, SPVs, investment banks, credit rating agencies, and investors. Securitization allows originators to transfer risk and improve their balance sheets, while providing investors opportunities for returns through new financial products.
Marine Insurance is considered to be a tough nut to crack. This slide presentation would give the viewers some basic aspects of Marine Insurance. Suggestions and comments are welcome.
Credit Impairment under IFRS 9 for BanksFaraz Zuberi
A quick overview of credit impairment under IFRS 9 for banks. Those with limited or no understanding of new requirements for loan loss accounting, will get a quick high level understanding of an accounting standard that is the most significant change in accounting for loan losses in more than a decade.
Securitization is the process of combining various financial assets, such as mortgages, car loans, and credit card debt, into securities that are sold to investors. This is done through a special purpose vehicle (SPV) that purchases the assets from their originator and repackages them into new securities backed by those assets. Mortgage-backed securities are a common example, where mortgages are pooled, divided into tiers of risk, and sold as securities. SPVs play an important role by isolating risk, allowing assets to be securitized without affecting the originator, and providing bankruptcy protection for investors.
It is a power point presentation for fire insurance. It is mostly applicable for Iran's insurance industry but it also covers fire insurance for worldwide purposes.
A credit default swap (CDS) is a contract where the buyer makes periodic payments to the seller in exchange for a payoff if a third party defaults on its debt obligations. It allows one party to transfer the credit risk of a loan or bond to another party. For example, a bank (buyer) pays premiums to a hedge fund (seller) to insure against the risk of a borrower defaulting on its loan. If the borrower defaults, the seller pays the buyer the full value of the loan.
This presentation provides readers with an introduction to bonds and their many characteristics. Topics discussed such as types of bonds, bond trading, valuing bonds and much more are highlighted in this presentation and can be further discussed on our site www.finpipe.com.
This document discusses traditional and alternative insurance options for catastrophe risks such as hurricanes, earthquakes, and floods. It provides details on:
- Traditional reinsurance and its limitations in fully meeting coverage demands, leading to the growth of alternative options like catastrophe (CAT) bonds.
- How CAT bonds work, including being issued by a special purpose vehicle to provide reinsurance coverage to primary insurers and allow access to capital markets.
- The components and uses of CAT models, which are computer simulations used to analyze catastrophe risk and loss exposures in property portfolios. CAT models help price coverage and allocate capital.
- Key considerations for primary insurers in deciding between traditional reinsurance or CAT bonds to transfer catastrophe
This document discusses securitization, which involves pooling various types of loan assets and converting them into marketable securities. The securitization process involves an originator selecting and packaging loan assets, which are then sold to a special purpose vehicle (SPV). The SPV then converts the assets into securities and sells them to investors. Various players are involved, including originators, SPVs, investment banks, credit rating agencies, and investors. Securitization allows originators to transfer risk and improve their balance sheets, while providing investors opportunities for returns through new financial products.
Marine Insurance is considered to be a tough nut to crack. This slide presentation would give the viewers some basic aspects of Marine Insurance. Suggestions and comments are welcome.
Credit Impairment under IFRS 9 for BanksFaraz Zuberi
A quick overview of credit impairment under IFRS 9 for banks. Those with limited or no understanding of new requirements for loan loss accounting, will get a quick high level understanding of an accounting standard that is the most significant change in accounting for loan losses in more than a decade.
Securitization is the process of combining various financial assets, such as mortgages, car loans, and credit card debt, into securities that are sold to investors. This is done through a special purpose vehicle (SPV) that purchases the assets from their originator and repackages them into new securities backed by those assets. Mortgage-backed securities are a common example, where mortgages are pooled, divided into tiers of risk, and sold as securities. SPVs play an important role by isolating risk, allowing assets to be securitized without affecting the originator, and providing bankruptcy protection for investors.
It is a power point presentation for fire insurance. It is mostly applicable for Iran's insurance industry but it also covers fire insurance for worldwide purposes.
A credit default swap (CDS) is a contract where the buyer makes periodic payments to the seller in exchange for a payoff if a third party defaults on its debt obligations. It allows one party to transfer the credit risk of a loan or bond to another party. For example, a bank (buyer) pays premiums to a hedge fund (seller) to insure against the risk of a borrower defaulting on its loan. If the borrower defaults, the seller pays the buyer the full value of the loan.
A bond is a (written and signed promise) debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate (Coupon Rate).
For full text article go to : http://www.educorporatebridge.com/securitization/securitization-of-assets This Article explain concepts like securitization of asset, meaning of securitization in layman language, ABS,MBS,CDO,CMO etc.
This document provides an overview of marine insurance. It discusses what marine insurance is, the different branches including ocean marine and inland marine insurance. It also outlines the main types of marine insurance like cargo insurance, hull insurance, freight insurance, and marine liability insurance. The principles governing marine insurance contracts are also summarized, including utmost good faith, insurable interest, indemnity, and causa proxima. Finally, it describes the different types of losses covered, specifically total losses like actual and constructive total loss, and partial losses such as particular average loss and general average loss.
The concept of Cost of capital for MNC is addressed in this ppt
Subscribe to Vision Academy for Video assistance https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
This document provides an overview of insurance products in India. It discusses the definitions of insurance, the regulatory body IRDAI, and the major players in life and general insurance - LIC, GIC and their subsidiaries. It also summarizes various life insurance products like children's plans, pension plans, whole life plans, and unit plans. For general insurance, it briefly covers types like motor insurance, health insurance, home insurance, marine insurance, travel insurance, and commercial insurance.
A mutual fund is a pool of money managed by a professional that invests in stocks, bonds, and other securities. It allows small investors to participate in a diversified portfolio. Benefits include professional management, diversification, liquidity, and flexibility. Fees include front-end loads, back-end loads, and management expense ratios. Major asset classes are money market, bond, balanced, dividend, equity, and specialty funds. Equity funds focus on Canadian, US, or international stocks using value, growth, or momentum investment styles.
The document discusses various topics related to pricing, designing, and marketing public issues in India. It defines public issues and the role of merchant bankers. It covers SEBI guidelines on issue advertisements, methods of determining offer price, and the responsibilities of lead managers in marketing public issues. Recent market strategies discussed include marketing IPOs through secondary markets and targeting different investor classes through specialized bonds.
There are three main types of traders in futures markets - hedgers who seek to reduce risk, speculators who take on risk in hopes of profiting from price movements, and arbitrageurs who exploit temporary mispricings across related markets. Futures contracts are standardized to specify the deliverable asset, amount, location, and timing of delivery. Daily mark-to-market and margin adjustments help minimize the risk of default on futures positions.
This document provides an introduction and overview of insurance. It discusses that insurance helps spread risk over many individuals and helps people recover from losses. Insurance is important for businesses to manage risks to property, equipment, inventory and more.
The document then defines insurance as a social device that provides financial compensation for losses through accumulated contributions of participants. It explains key insurance terms like insurer, insured, policy, and premium. It distinguishes assurance which guarantees payment of a sum, from insurance which covers risks that may or may not occur.
Finally, the document outlines principles of insurance like utmost good faith between parties, the requirement of insurable interest, the principle of indemnity where payment covers actual loss, and other principles like
This document provides information about Unit Linked Insurance Plans (ULIPs) presented by Subrato Banerjee. It discusses the profile of ING Life Insurance Company, features of ULIPs such as flexibility, transparency, and tax benefits. It also outlines the various charges associated with ULIPs and guidelines from IRDA. Two ULIP plans from ING are highlighted - ING Market Shield which guarantees the highest NAV throughout the policy term, and ING Prospering Life which offers features like switching, partial withdrawal, and investment fund options with automatic asset allocation strategies.
,
marine insurance
,
types of marine insurance policy
,
features of marine ins. contract
,
marine perils
,
general average loss vs particular average loss
,
differences bet. the marine and fire ins
Insurance, system of insurance accountingsooraj yadav
Insurance involves pooling funds from many insured entities to pay for losses some may incur. It protects insured entities from risk in exchange for a fee dependent on the likelihood and cost of events. There are two main types of insurance - life insurance which pays out on death or maturity, and general insurance like health, auto, or fire insurance which pays depending on financial losses from covered events. Insurance companies make money through underwriting risks and investing premiums paid, while providing protection through claims payments.
introduction to financial intermediaries
working of financial intermediaries
importance of financial intermediaries
for whom financial intermediaries are working?
Marine shipping insurance has existed since the late 17th century when sailors at Lloyd's coffee house in London would discuss insurance. Today, over 50,000 merchant ships internationally carry 90% of global trade. There are several reasons for requiring insurance, such as legal compliance, financial protection from losses, and protection from dangers at sea. Common types of marine insurance include cargo insurance, war risk policies, and insurance for ships under construction. Key parties in marine insurance are the carrier, charterer, consignee, and consignor. A bill of lading is a critical legal document that accompanies all shipments by sea.
This document discusses three main approaches to modeling credit risk: structural, reduced form, and incomplete information. It provides details on the structural approach using the Merton and first passage models and the reduced form approach using a Poisson process for default. It also discusses extending these models to value bank loans, specifically comparing the structural KMV model and reduced form CreditRisk+ model. The critiques note limitations like non-observability of variables, lack of dynamics, and potential underestimation of risk.
This document provides an overview of marine insurance and key concepts related to business risk management. It defines marine insurance as a contract where the insurer agrees to indemnify the insured for losses from marine adventures. Some key points covered include the meaning and purpose of marine insurance policies, principles like utmost good faith and insurable interest, types of policies and clauses, insured perils and exclusions, losses like total/partial/average losses, and warranties. The document also compares the different levels of coverage under the Institute Cargo Clauses A, B and C.
This presentation discusses the importance of having a diversified portfolio with a variety of different kinds of investments and tips on creating a diversified portfolio.
Here I am Sharing Presentation about Mutual Fund Which is beneficial for Finance Student. Who one want to know details of mutual fund can see this slide this will be helpful to the student of finance.
All The Best
Investment Analysis and Portfolio ManagementBabasab Patil
This document summarizes key points about investment analysis and portfolio management. It discusses the module website resources, gains and losses from past investments, markets and security types, brokers, returns and risks, and the investment process. The essential topics covered are types of markets and securities, factors that influence investment returns and risks, and the basic steps in analyzing investments and constructing a portfolio.
The document discusses captive insurance strategies for middle market companies. It outlines how captives can be used to minimize taxes and insurance costs. Captives allow businesses to retain uninsured risks and accumulate wealth in a tax-advantaged structure. Forming a captive through an experienced manager provides turn-key solutions for compliance, management, and other regulatory requirements.
Roles for Financial Engineering In the Life Insurance IndustryFrank Zhang
Roles for Financial Engineering in the Life Insurance Industry
[1] Life insurance products are increasingly derivatives oriented and many of the same derivatives valuation techniques apply. [2] The hybrid products also create unique challenges and opportunities to financial engineers and derivative markets. [3] Quantitative research and stochastic model development are needed to address pricing of guarantees, hedging strategies, and dynamic policyholder behavior modeling.
A bond is a (written and signed promise) debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate (Coupon Rate).
For full text article go to : http://www.educorporatebridge.com/securitization/securitization-of-assets This Article explain concepts like securitization of asset, meaning of securitization in layman language, ABS,MBS,CDO,CMO etc.
This document provides an overview of marine insurance. It discusses what marine insurance is, the different branches including ocean marine and inland marine insurance. It also outlines the main types of marine insurance like cargo insurance, hull insurance, freight insurance, and marine liability insurance. The principles governing marine insurance contracts are also summarized, including utmost good faith, insurable interest, indemnity, and causa proxima. Finally, it describes the different types of losses covered, specifically total losses like actual and constructive total loss, and partial losses such as particular average loss and general average loss.
The concept of Cost of capital for MNC is addressed in this ppt
Subscribe to Vision Academy for Video assistance https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
This document provides an overview of insurance products in India. It discusses the definitions of insurance, the regulatory body IRDAI, and the major players in life and general insurance - LIC, GIC and their subsidiaries. It also summarizes various life insurance products like children's plans, pension plans, whole life plans, and unit plans. For general insurance, it briefly covers types like motor insurance, health insurance, home insurance, marine insurance, travel insurance, and commercial insurance.
A mutual fund is a pool of money managed by a professional that invests in stocks, bonds, and other securities. It allows small investors to participate in a diversified portfolio. Benefits include professional management, diversification, liquidity, and flexibility. Fees include front-end loads, back-end loads, and management expense ratios. Major asset classes are money market, bond, balanced, dividend, equity, and specialty funds. Equity funds focus on Canadian, US, or international stocks using value, growth, or momentum investment styles.
The document discusses various topics related to pricing, designing, and marketing public issues in India. It defines public issues and the role of merchant bankers. It covers SEBI guidelines on issue advertisements, methods of determining offer price, and the responsibilities of lead managers in marketing public issues. Recent market strategies discussed include marketing IPOs through secondary markets and targeting different investor classes through specialized bonds.
There are three main types of traders in futures markets - hedgers who seek to reduce risk, speculators who take on risk in hopes of profiting from price movements, and arbitrageurs who exploit temporary mispricings across related markets. Futures contracts are standardized to specify the deliverable asset, amount, location, and timing of delivery. Daily mark-to-market and margin adjustments help minimize the risk of default on futures positions.
This document provides an introduction and overview of insurance. It discusses that insurance helps spread risk over many individuals and helps people recover from losses. Insurance is important for businesses to manage risks to property, equipment, inventory and more.
The document then defines insurance as a social device that provides financial compensation for losses through accumulated contributions of participants. It explains key insurance terms like insurer, insured, policy, and premium. It distinguishes assurance which guarantees payment of a sum, from insurance which covers risks that may or may not occur.
Finally, the document outlines principles of insurance like utmost good faith between parties, the requirement of insurable interest, the principle of indemnity where payment covers actual loss, and other principles like
This document provides information about Unit Linked Insurance Plans (ULIPs) presented by Subrato Banerjee. It discusses the profile of ING Life Insurance Company, features of ULIPs such as flexibility, transparency, and tax benefits. It also outlines the various charges associated with ULIPs and guidelines from IRDA. Two ULIP plans from ING are highlighted - ING Market Shield which guarantees the highest NAV throughout the policy term, and ING Prospering Life which offers features like switching, partial withdrawal, and investment fund options with automatic asset allocation strategies.
,
marine insurance
,
types of marine insurance policy
,
features of marine ins. contract
,
marine perils
,
general average loss vs particular average loss
,
differences bet. the marine and fire ins
Insurance, system of insurance accountingsooraj yadav
Insurance involves pooling funds from many insured entities to pay for losses some may incur. It protects insured entities from risk in exchange for a fee dependent on the likelihood and cost of events. There are two main types of insurance - life insurance which pays out on death or maturity, and general insurance like health, auto, or fire insurance which pays depending on financial losses from covered events. Insurance companies make money through underwriting risks and investing premiums paid, while providing protection through claims payments.
introduction to financial intermediaries
working of financial intermediaries
importance of financial intermediaries
for whom financial intermediaries are working?
Marine shipping insurance has existed since the late 17th century when sailors at Lloyd's coffee house in London would discuss insurance. Today, over 50,000 merchant ships internationally carry 90% of global trade. There are several reasons for requiring insurance, such as legal compliance, financial protection from losses, and protection from dangers at sea. Common types of marine insurance include cargo insurance, war risk policies, and insurance for ships under construction. Key parties in marine insurance are the carrier, charterer, consignee, and consignor. A bill of lading is a critical legal document that accompanies all shipments by sea.
This document discusses three main approaches to modeling credit risk: structural, reduced form, and incomplete information. It provides details on the structural approach using the Merton and first passage models and the reduced form approach using a Poisson process for default. It also discusses extending these models to value bank loans, specifically comparing the structural KMV model and reduced form CreditRisk+ model. The critiques note limitations like non-observability of variables, lack of dynamics, and potential underestimation of risk.
This document provides an overview of marine insurance and key concepts related to business risk management. It defines marine insurance as a contract where the insurer agrees to indemnify the insured for losses from marine adventures. Some key points covered include the meaning and purpose of marine insurance policies, principles like utmost good faith and insurable interest, types of policies and clauses, insured perils and exclusions, losses like total/partial/average losses, and warranties. The document also compares the different levels of coverage under the Institute Cargo Clauses A, B and C.
This presentation discusses the importance of having a diversified portfolio with a variety of different kinds of investments and tips on creating a diversified portfolio.
Here I am Sharing Presentation about Mutual Fund Which is beneficial for Finance Student. Who one want to know details of mutual fund can see this slide this will be helpful to the student of finance.
All The Best
Investment Analysis and Portfolio ManagementBabasab Patil
This document summarizes key points about investment analysis and portfolio management. It discusses the module website resources, gains and losses from past investments, markets and security types, brokers, returns and risks, and the investment process. The essential topics covered are types of markets and securities, factors that influence investment returns and risks, and the basic steps in analyzing investments and constructing a portfolio.
The document discusses captive insurance strategies for middle market companies. It outlines how captives can be used to minimize taxes and insurance costs. Captives allow businesses to retain uninsured risks and accumulate wealth in a tax-advantaged structure. Forming a captive through an experienced manager provides turn-key solutions for compliance, management, and other regulatory requirements.
Roles for Financial Engineering In the Life Insurance IndustryFrank Zhang
Roles for Financial Engineering in the Life Insurance Industry
[1] Life insurance products are increasingly derivatives oriented and many of the same derivatives valuation techniques apply. [2] The hybrid products also create unique challenges and opportunities to financial engineers and derivative markets. [3] Quantitative research and stochastic model development are needed to address pricing of guarantees, hedging strategies, and dynamic policyholder behavior modeling.
The document discusses the history and challenges facing stable value funds, which are a popular low-risk investment option in defined contribution plans. It outlines changes in money market fund rules that impact stable value funds. The document analyzes replacement options for stable value funds like money market funds, ultra-short term bonds, and short-term government bonds. It provides characteristics of these replacement options and how they differ from stable value funds in terms of risk, return potential, and regulation.
The document discusses micro-insurance practices and prospects in India. It introduces micro-insurance and describes common product types like loan-linked insurance, health insurance, and long-term insurance. It also examines the micro-insurance supply chain and popular distribution channels in India like MFIs, NGOs/CBOs, and government programs. Loan-linked life insurance dominates the Indian micro-insurance market.
The document discusses various methods for transferring pension risk, including buy-outs and swaps. It outlines the benefits and drawbacks of different longevity swaps and buy-out options. It also discusses key considerations for managing risks, governance, and legal structures when implementing these transfers of pension obligations and longevity risks.
This document summarizes key topics related to over-the-counter (OTC) collateralization, credit valuation adjustment (CVA), and funding valuation adjustment (FVA). It discusses:
1) Practical challenges of untangling credit and funding costs in derivatives valuation given changing regulation and market standards.
2) Issues around risk-free rates, multi-curve environments, and risky sovereign debt affecting collateral and valuation.
3) Evolving business models around central clearing counterparties (CCPs), CVA desks, and collateral transformation in response to these issues.
4) Modeling of collateral agreements and the reduction but not elimination of counterparty risk through collateralization.
5)
The document discusses FDIC-insured deposits as an investment opportunity with higher yields than Treasuries. It notes the full faith and credit guarantee by the US government for deposits up to $250,000 per depositor per institution. It also discusses the challenges institutional investors face in taking advantage of these higher yields, including sourcing deposits from many banks, tracking insurance limits, and liquidity issues. The document proposes a structural platform to source, screen, and construct portfolios of FDIC-insured deposits to help institutional investors overcome these hurdles.
The document discusses FDIC-insured deposits as an investment opportunity with higher yields than Treasuries. It notes the full faith and credit guarantee by the US government for deposits up to $250,000 per depositor per institution. It also discusses the challenges institutional investors face in taking advantage of these higher yields, including sourcing deposits from many banks, tracking insurance limits, and liquidity issues. The document proposes a structural platform to source, screen, and construct portfolios of FDIC-insured deposits to help institutional investors overcome these hurdles.
The document discusses FDIC-insured deposits as an investment opportunity with higher yields than Treasuries. It notes the full faith and credit guarantee by the US government for deposits up to $250,000 per depositor per institution. It also discusses the structural platform that would source, screen, and construct portfolios of FDIC-insured deposits to overcome hurdles to institutional investment, such as managing insurance limits and minimizing intermediary costs and fees. The platform would source both new issues and secondary market deposits to benefit buyers and sellers.
Danajamin Nasional Berhad is Malaysia's first financial guarantee insurer established by the Prime Minister with an initial capital of RM1 billion from the government. It will provide insurance guarantees of up to RM15 billion to facilitate the issuance of private debt securities. Danajamin will assess companies' creditworthiness and provide risk-based guarantees in exchange for premiums, enabling issuers access to long-term capital at competitive rates. This aims to stimulate the economy by improving credit availability, particularly for deserving lower investment grade firms.
The document discusses credit derivatives and the credit derivatives market in India. It provides information on different types of credit derivatives including credit default swaps (CDS), credit linked notes (CLN), and credit spread options (CSO). It then discusses the growth of the CDS market globally and the composition of the credit derivatives market. It outlines the benefits of credit derivatives for banks and other financial institutions in India. Finally, it discusses the role of the Clearing Corporation of India in facilitating CDS trading and settlement and provides details on the first CDS trades in India in 2011.
The document discusses the causes of the subprime mortgage crisis and how it spread through the financial system. It describes how low interest rates led to overinvestment in the housing market. Mortgage lenders lowered standards and offered risky loans. When housing prices declined and interest rates rose, there was a wave of defaults. Financial institutions had transferred risk through securities and derivatives, spreading losses throughout the global financial system and causing the near-collapse of some major firms.
Collateral management can help mitigate risks and meet increased regulatory requirements. It offsets credit exposure and potential future exposure if a counterparty defaults. An accurate understanding of how collateral impacts credit risk is important. Developing a cross-business collateral management team provides opportunities to lower costs and complexity compared to separate siloed teams. Mastering collateral management practices allows using a triparty agent for repos and tailored structures on a single platform, reducing costs.
This document compares two business models for insurance contracts: (1) the underwriting business model and (2) the asset-liability business model.
The underwriting business model focuses on underwriting income or loss, with key metrics of premiums charged and earned and claims incurred. Risks are re-underwritten annually and contracts are cancellable. The asset-liability business model focuses on investment results, mortality, and lapse experience, with premiums and returns on investment as key metrics. Risks are not re-underwritten annually and contracts terminate upon occurrence of the insured risk event.
FERMA member association Airmic is grateful to Chartis for producing this guide to captive insurance companies.
Airmic invited partners to select an area of expertise and produce an introductory to intermediate level guide for the benefit of Airmic members. The intention of this guide is to provide members with an overview of the topic and provide information on the practical considerations when managing this important insurance issue.
This guide has been written with a view to providing members with support when faced with such questions as...
- “What alternatives are available to buying cover in the commercial market?”
- “Can we save on premium spend and can we take more control of our risks?”
- “What do we need to do and what will it cost?”
If you already have a captive you may be asked to explain why and what it provides that the commercial market does not.
This is by no means a definitive guide; however we hope it will go some way to answer these questions and to help in your understanding of the world of captives and how they may work for your organisation.
This guide will take you through the life cycle of a captive from initial concept through to the benefit and uses and finally to exit strategies.
The document summarizes a session from the Society of Actuaries Spring Meeting on building and maintaining effective risk dashboards. The session discussed what risk dashboards are, their purpose in providing consolidated risk reporting across an enterprise. Keys to success include integrating different risk types into a single dashboard and ensuring executive sponsorship. The session also provided a case study on how risk dashboards could have helped identify risks in the subprime mortgage crisis. Implementation challenges included issues with data availability, integration into decision making processes, and legal implications of disclosing risk information.
Asset intensive reinsurance has been a hot topic in the marketplace, in particular reinsurance for fixed annuities, variable annuities and indexed annuities.
With variable annuities in particular, the products have been written recently specifically combat the difficulties posed by the low interest rate environment. With GAAP ROEs as healthy as ever, solution providers (banks/reinsurers) are looking to enter into the variable annuity reinsurance market to get their "share of the pie".
The asset intensive reinsurance world is evolving rapidly, and I will be presenting this evolution for certain high-profile products during the Valuation Actuary Symposium on 8/31 at 10:00 AM.
Hope to see many of you friendly faces there!
This document discusses trade receivables and their associated risks from the perspective of an expert in the field. Trade receivables represent a mixture of credit risk from buyers' inability to pay and operational risks like contractual disputes, fraud, and errors. Technological advances have improved transparency but issues remain around underwriting criteria, transparency, and risks becoming conflated. Credit insurance provides a good hedge against credit risk but involves operational risks. New platforms aim to capture both buyer and seller data to better finance and mitigate risks in receivables.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
How Does CRISIL Evaluate Lenders in India for Credit RatingsShaheen Kumar
CRISIL evaluates lenders in India by analyzing financial performance, loan portfolio quality, risk management practices, capital adequacy, market position, and adherence to regulatory requirements. This comprehensive assessment ensures a thorough evaluation of creditworthiness and financial strength. Each criterion is meticulously examined to provide credible and reliable ratings.
2. Introduction
The market for insurance risk transfer to the debt capital
markets started after Hurricane Andrew and the Northridge
Earthquake in the 1990s and has grown into an important
catastrophe risk management tool
Cat bonds offer an alternative capacity source for natural
catastrophe insurance
Investor interest continues to grow due to attractive yields and
increased understanding of natural catastrophe risk
Since 1997,when the market began in earnest, by July 2009, 141
cat bonds have been issued, with total risk limits of USD27bn.
Cat bonds and other ILS products may in the future prove to be
useful risk management tools here in China and elsewhere in Asia
2
3. Outline
• Cat Bond Basics
– Securitization Review
– Bond structure
– Case Study
• Market Dynamics
– From 1997 to 2004
– From 2005 to 2007
– From 2008 to present
• Prospect in China
– Urgency
– Challenges
– Suggestions
3
4. Cat Bond Basics:
1. Securitization Review
• Securitization:
– Packaging and selling of loans and other assets backed by
securities
– Result of securitization is ABS(Asset Backed Security)
– Investors bear return and risks
• Examples:
– XYZ Bank loans 10 people $100,000 a piece
– Put them in a pool and sell this pool to a larger entity, ABC.
– ABC will then split this pool into equal pieces.
– The pieces will then be sold to other smaller investors (as
bonds).
4
5. Cat Bond Basics:
1. Securitization Review
• Insurance-linked Securities:
– Transfer insurance-related risks to capital market
• category:
Non-life Life
Mass Risk Protection Financing tool by turning
Non-Cat
future income into capital
Motor Insurance Securitization Embedded value securitization
Regulatory capital
Our main
topic today Protection for extreme Extreme risk transfer
Cat
events
Hurricane and earthquake cat Mortality bond
bonds Longevity bond( first trial failed)
5
6. Cat Bond Basics:
2. Bond Structure
Other entities
• Cat Bond involved:
Risk Modeling
– Transfer catastrophe risk to capital market Firm;
Total Return Investment
Swap Bank;
is a financial Investments ③ Rating Agency
contract Bond Insurer;
which proceeds principle principle ②
.
transfers both ① premium
the credit risk Sponsor SPV Coupon
Investors
and market (Cedant) (Issuer)
Contingent
risk of an payment
principle
underlying Agreed
proceeds
asset. rate Loss
④ Reporting
Swap
counterparty Agency
6
7. Cat Bond Basics:
2. Bond Structure
• Trigger System:
Basis Risk is the – Transparency directly influence the issuer’s Basis Risk, higher
risk that, in the transparency leads to greater Basis Risk
event of a covered
loss, the payout • Sort:
determined by – indemnity-based
the bond
calculation will – index-based
differ from the • parametric trigger:ShakeMap (US) for earthquakes; AMeDAS ( Japan )
actual loss for typhoon
incurred by the • industry loss trigger:PCS( property claim services); Sigma; PERILS ( Pan-
sponsor. European Risk Insurance Linked Services); NatCatSERVICE
• modeled loss trigger)
– hybrid trigger
• Two-peril transaction, US hurricane and Japanese earthquake perils
7
8. Cat Bonds Basics:
2. Bond Structure
New Opportunity
• Sponsors Perception ( compared with reinsurance)
– Risk transferred are usually 100- 250 years
– Collateral guarantee for extreme event
– Lock risks with year-to-year constant price
• Investors Perception
– Less correlation with other assets return
– Good hedging instrument
8
9. Cat Bonds Basics:
3. Case Study: Blue Wings Ltd
Blue Wings is the
USD1bn multi-peril
• Sponsor: Allianz Global Corporate & Specialty AG
shelf program Blue Wings Ltd., a special purpose
sponsored by • Issuer: Cayman Islands exempted company
Allianz Global Swiss Reinsurance Company
Corporate & • Intermediary:
On or after the Initial Issuance Date, the
Specialty AG (AGCS),
and intermediated • Program design: Issuer may from time to time issue one or
by Swiss Re more Class(es) of Notes in distinct Series
pursuant to this USD1bn Program
Reinsurance Contract(s)
Allianz
Global Swiss
Definition of Corporate & Reinsurance
Specialty Company
Shelf Offering Premium
Financial Contract(s) Premium
Investment Income Proceeds
Blue Wings Ltd
SwapCounter-
Swap
Counterparty
party Coupon: LIBOR + spread Investors
Issuer collateral
LIBOR - spread & payment Return of Outstanding
+ Investment Losses Amount at Maturity
9 account
10. Cat Bonds Basics:
3. Case Study: Blue Wing Ltd
This innovative Class/Series: Class A, Series 1
transaction marks
an important step Principal Amount: USD 150 million
of the ILS market Covered Perils: A combination of Canada and US earthquake,
as it is the first cat excluding California (“EQ”), & Great Britain river
bond with risk flood (“FL”)
based on river
flood
Trigger: Modeled Loss for EQ & Parametric Index
for FL
Sole Arranger and Lead Manager: Swiss Re Capital Markets
Modeling Firm/Calculation Agent: Risk Management Solutions (“RMS”)
Flood Measurement Agent: Halcrow Group Limited (“Halcrow”)
Expected Loss: 0.54% (Annualized, 0.43% EQ; 0.11% FL)
Risk Period: April 4, 2007 to December 31, 2011
Maturity: January 10, 2012
Rating: BB+ (S&P)
Price: 3M LIBOR + 315 bps
10
11. Outline
• Cat Bonds Basics:
– Securitization Review
– Bond structure
– Case Study
• Market Dynamics
– From 1997 to 2004
– From 2005 to 2007
– From 2008 to present
• Prospect in China
– Urgency
– Challenges
– Suggestions
11
12. Market Dynamics
• Hannover Re issued the first cat bond in 1994
• In 1997, there existed five cat bond transactions which
marks the beginning of the Cat Bond Market
From 1997 to 2004 30
27
25
From 2005 to 2007
20 20
From 2008 to Pres. 18
15
13
10 10 10
9
8
7 7 7
6
5 5
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
12 Source: Guy Carpenter 发行数量
13. Market Dynamics
from 1997 to 2004(pre-Katrina period)
• From 1997 to 2004, CatBond Market developed slowly
with small amount of transaction and volume
12
10 10
9
8 8
7 7 7
6 6
5
4
2
0
1997 1998 1999 2000 2001 2002 2003 2004
发行数量
13 Source: Guy Carpenter
14. Market Dynamics
from 1997 to 2004(pre-Katrina period)
• Yearly new issued CatBond value
2000
1800
1729.8
1600
1400
1200 1219.5
1139 1142.8
1000 984.8 966.9
800 846.1
600 633
400
200
0
1997 1998 1999 2000 2001 2002 2003 2004
Source: Guy Carpenter 新发行债券额
• Reason
– Investors’ uncertainty about new instrument
– Complex design and high issuing cost
– Other substitutes such as catastrophe insurance
14
15. Market Dynamics:
Katrina Hurricane
• Date: 24-30 Aug, 2005
• Country/place: US, Gulf of Mexico, Bahamas, North
Atlantic, LA, MS, AL, FL, TN, New Orleans, Biloxi,
Mississippi, Mobile, Gulfport
• Event: with winds up to 224km/h, Mississippi banks
burst, New Orleans flooded, severe damage to oil rigs
• Casualty: 1326 dead;75,000 homeless; $45bn insured
loss; $135bn total damage
15 Source: Swiss Re sigma2006
16. Market Dynamics:
aftermath of Katrina Hurricane(1)
KAMP Re
protects Zurich
American • The first publicly disclosed total loss to a catastrophe
Insurance bond in KAMP Re 2005 .
Corporation
against U.S. • Rating agencies to revise their capital requirements
hurricanes for upward for insurers and reinsurers with catastrophe
three years and exposures
also against
quakes on the • Risk modeling firms to announce their intention to
New Madrid revise their models
fault. The bond
will be triggered • Because of these reasons, with the exception of one
if Zurich's losses offering, all 2005 transactions brought to market post-
from a single
storm or quake Katrina settled at yields considerably above comparable
rise above 2004 issues
$1bn.
16
17. Market Dynamics:
aftermath of Katrina Hurricane(1)
17 Source: Guy Carpenter
18. Market Dynamics:
aftermath of Katrina Hurricane(2)
• A dramatic rise in the cost of reinsurance for companies
that had suffered catastrophe losses
• A substantial increase in the degree of uncertainty
concerning renewal pricing and capacity available from
traditional reinsurance writers of catastrophe lines
• The placement of a significant quantity of cat bonds in
a short period of time to mitigate impending rating
agency concerns and secure fully collateralized capacity
18
19. Market Dynamics:
aftermath of Katrina Hurricane(2)
Source: Guy Carpenter
19
20. Market Dynamics:
from 2006 to 2007(post-Katrina Period)
• From 2006, CatBond began to develop rapidly
– Yearly new issued amount of bonds
30
25
20
15
10
5
0
2005 2006 2007
发行数量
– Yearly new issued value of bonds
8000
6996.3
6000
4693.4
4000
2000 1991.1
0
2005 2006 2007
20 新发行债权额
21. Market Dynamics:
from 2006 to 2007(post-Katrina Period)
• Shelf-offering become more and more popular
– This reflects that Cat Bond purchases shift from tactical to
strategic
Source:
Guy Carpenter
21
22. Market Dynamics:
from 2008 to present
• From 2008, influenced by Financial Crisis, CatBond
suffered slow development. Only 14 bonds were issued
in 2008, which is greatly below the level of 2007
30
25
20
15
10
5
0
2006 2007 2008
发行数量
22
23. Market Dynamics:
from 2008 to present
• The severe impact of the Lehman Brothers default on
Cat Bonds
– Lehman was the TRS counterparty to the collateral accounts
for four Cat Bonds
– The failure of Lehman left investments in these accounts
without protection
– The ratings of the four transactions were subsequently
lowered and prices declined
– By the end of July 2009, two of the four bonds had gone into
default
23
24. Market Dynamics:
from 2008 to present
• The market has now changed and future issuance will
be more transparent
– Enhanced transparency with regard to the investments held in
the collateral trust
– Tighter investment restriction for the collateral account
regarding quality, liquidity
– More frequent mark-to-market of the collateral with the TRS
counterparty required to post any shortfalls to the collateral
account
– Alternatives to traditional TRS structure such as posting the
collateral in a bank deposit
24
25. Outline
• Cat Bonds Basics:
– Securitization Review
– Bond structure
– Case Study
• Market Dynamics
– From 1997 to 2004
– From 2005 to 2007
– From 2008 to present
• Prospect in China
– Urgency
– Challenges
– Suggestions
25
26. Prospect in China:
1. Urgency
• (1)Frequent natural disaster
• (2)Limited underwriting capacity of property
insurance company and reinsurance company
26
27. Prospect in China:
1. Urgency
• Increase underwriting capacity of domestic
insurance industry
• Reduce government burden, establish long-term
catastrophe compensate system
• Develop capital market
27
28. Prospect in China:
2. Challenges
(1)Market challenges of issuing CatBond
• Demand side:lack of institutional investors
• Supply side: non-market operation of catastrophe risks
28
30. Prospect in China:
2. Challenges
• (3)Regulation challenges of issuing CatBond
• Missing relevant regulation
• Limitation of separate regulation between insurance
industry and security industry
30
31. Prospect in China:
3. Suggestions
• (1)Construct Catastrophe risk indexes system,
improve catastrophe pricing abiluty
—integrate catastrophe database
—country index, region index, province index
—establish simulate model of China catastrophe
• (2)Completed credit rating system
31
32. Prospect in China:
3. Suggestions
• (3) Develop Capital Market
—investment banking and evaluation intermediary
—Information revealing
Insurance company issuing CatBond should report
operation and financial status
32
33. Prospect in China:
3. Suggestions
• Government Leading Mode(Non-business)
– Practice in Taiwan
• Oversea Reinsurance Company Leading
Mode(Business)
33
36. References (参考文献)
• Guy Carpenter:
– Cat bond at the year-end 2002
– Cat bond at the year-end 2003
– Cat bond at the year-end 2004
– Cat bond at the year-end 2005
– Cat bond at the year-end 2006
– Cat bond at the year-end 2007
• Swiss Re:
– Sigma No.4/2009, the role of indices in transferring
insurance risk to capital market
– Sigma No.7/2006, Securitization: new opportunities for
insurers and investors
36