Risk Transfer to Insurance Markets

This course examines risk transfer to insurance markets. Topics covered will include the variety of ways that risk transfer can occur including quota share and excess of loss agreements, catastrophe bonds, captives, reciprocals, segregated cells, and their structuring, such as retention, limits, corridors, collateralization, reinstatement, and commutation provisions, and structured/financial insurance. Insurance products will be evaluated for their efficiency in risk transfer. How effective insurance markets are relative to capital markets will be evaluated in terms of terms and conditions, pricing, and basis risk. Prereq. or coreq.: Undergraduate degree in accounting or completion of Graduate Core Curriculum: ECON 601, Introduction to Micro- and Macroeconomics; ECON 602, Introduction to Corporate Finance and Money and Banking; ECON 649, Statistics as Applied to Economics and Business; and ACCT 600, Financial Theory and Accounting Practice, Part I, or permission of program director. RM 701, Introduction to Risk Management is recommended.This course examines risk transfer to insurance markets. Topics covered will include the variety of ways that risk transfer can occur including quota share and excess of loss agreements, catastrophe bonds, captives, reciprocals, segregated cells, and their structuring, such as retentions, limits, corridors, collateralization, reinstatement, and commutation provisions, and structured/financial insurance. Insurance products will be evaluated for their efficiency in risk transfer. How effective insurance markets are relative to capital markets will be evaluated in terms of terms and conditions, pricing, and basis risk.