Insurance-Linked Securities Offer Investors New Solutions

Jun 30, 2010, 09:25 ET from Risk Books (Part of Incisive Media plc)

LONDON, June 30 /PRNewswire/ -- Insurance-linked securities (ILS) have developed into a distinct asset class that is generating strong interest from investors attracted to the promise of relatively low correlation with traditional financial markets, and the potential for high risk-adjusted returns. The growing need for information on this asset class is addressed in a new book by Alex Krutov, Investing in Insurance Risk: Insurance-Linked Securities – a Practitioner's Perspective, published by Risk Books. The author, a leading authority on insurance-linked securities and insurance securitisation, offers a comprehensive guide to the products that bridge the gap between insurance and capital markets.

Investing in Insurance Risk brings together, for the first time in one volume, all of the strategic and practical aspects of structuring, pricing, trading, and managing insurance-linked securities on a portfolio basis.  Sharing his deep expertise as an investment and insurance professional, Alex Krutov provides insights into the value of gaining exposure to the various types of insurance-linked securities available to investors.  Securities linked to both property/casualty and mortality/longevity risks are covered.  The list includes, among others, such instruments as:

  • catastrophe ("cat") bonds
  • extreme mortality bonds
  • industry loss warranties
  • catastrophe derivatives
  • collateralised reinsurance
  • reinsurance sidecars
  • weather derivatives
  • securities linked to funding regulatory reserves
  • value-in-force securities
  • life settlements
  • longevity-linked derivatives

This in-depth review of insurance-linked securities is rounded out by evaluating techniques for their analysis, and discussing principles for managing insurance risk on a portfolio basis.  The author places a particular emphasis on modelling catastrophe risk; in addition he carefully examines life settlements, usually treated separately from other types of insurance-linked securities. The author also looks at insurance securitisation from the insurance company point of view, analysing advantages and disadvantages of the direct transfer of insurance risk to the capital markets.

This book is an essential resource for those active in the marketplace, and provides a grounding in the topic for those new to the field. Krutov offers a clear practitioner's perspective, expertly guiding the reader through this new, evolving and expanding market.

About Risk Books

Risk Books is an established world leader in books on the financial risk management and derivatives markets. It is a division of Incisive Media, the publisher of Risk and a leading global provider of specialist business news and information.


Phil Jackson

Incisive Media Ltd


SOURCE Risk Books (Part of Incisive Media plc)