Structured Finance and Insurance: The ART of Managing Capital and Risk
- 17h 22m
- Christopher L. Culp
- John Wiley & Sons (US)
- 2006
The evolution and development of structured finance and structured insurance (a.k.a. alternative risk transfer or ART) have provided increasing numbers of nonfinancial corporations with dynamic new techniques for creating value by integrating the management of capital and risk. A practical obstacle, however, has been the difficulty of structuring efficient, customized solutions to risk and capital management without—intentionally or not—creating even larger problems and pitfalls.
Structured Finance and Insurance explores the development of this new generation of products and solutions for managing market, credit, operational, legal, and other risks in the context of the broader themes of corporation finance and risk management. Risk managers, treasurers, and CFOs on the corporate side, as well as reinsurers, insurance brokers, and investment bankers on the product side, will gain new insights and knowledge through its well-organized approach:
- Part One provides a theoretical backdrop by reviewing the fundamental principles of capital management, corporation finance, risk transfer, and risk finance
- Part Two presents a review of traditional risk transfer with a strong emphasis on credit risk management—the products and solutions reviewed include insurance, reinsurance and retrocession, financial guarantees, sureties, and credit derivatives
- Part Three provides a detailed look at structured finance products and processes, including structured notes, hybrid and convertible structures, contingent capital, CDOs, and project/principal finance
- Part Four examines techniques of structured insurance and ART, including insurance-linked notes, captives and mutuals, finite risk, multi-line and multi-trigger structures, and contingent cover
- Part Five features valuable chapters written by leading experts on specific issues and topics including the treatment of insurance under the Basel Accord, trends in insurance securitizations, specific examples of the use of structured finance and insurance techniques to facilitate enterprise risk management, new accounting and disclosure requirements, and more
Structured Finance and Insurance provides today's most detailed and well-grounded coverage of the latest alternatives for managing corporate risks by either employing insurance solutions or accessing capital markets. Case studies and examples help practitioners to understand that while insurance and financial solutions are in many ways similar, they often possess critical differences that can explode on the unwary user. By helping capital markets and insurance professionals to speak the same language—the common language of capital management and corporate finance—this essential book will bring structure and precision to an often-cloudy world and help eliminate the confusion that has, in the past, turned the convergence of structured finance and insurance from a financial boon to a headline-making nightmare.
About the Author
Christopher L. Culp, Ph.D., is Director of Risk Management Consulting Services, Inc., in Chicago and Bern, Switzerland; Senior Fellow in Financial Regulation at the Competitive Enterprise Institute in Washington, D.C., an adjunct professor of finance at The University of Chicago’s Graduate School of Business; and an Honorarprofessor (Adjunct Professor) at UniversitĠt Bern in the Institut für Finanzmanagement. He consults actively in the areas of structured finance and insurance for (re)insurance companies and brokers, corporate users of structured products, asset managers, and law firms. Culp’s previous books from Wiley include Risk Transfer: Derivatives in Theory & Practice, The Risk Management Process, The ART of Risk Management, and Corporate Aftershock (as coeditor with William Niskanen.) Culp holds a Ph.D., in finance from The University of Chicago’s Graduate School of Business.
In this Book
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Structured Finance and Insurance—The ART of Managing Capital and Risk
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Foreword
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Real and Financial Capital
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Risk and Risk Management
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Leverage
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Adverse Selection and Corporate Financing Decisions
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Capital Budgeting, Project Selection, and Performance Evaluation
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Risk Transfer
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Risk Finance
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Insurance
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Reinsurance
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Credit Insurance and Financial Guaranties
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Derivatives
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Credit Derivatives and Credit-Linked Notes
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The Structuring Process
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Hybrids, Convertibles, and Structured Notes
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Contingent Capital
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Securitization
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Cash Collateralized Debt Obligations
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Synthetic Collateralized Debt Obligations
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Structured Synthetic Hybrids
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Securitizing Private Equity and Hedge Funds
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Project and Principal Finance
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Risk Securitizations and Insurance-Linked Notes
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Captives, Protected Cells, and Mutuals
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Finite Risk
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Multiline and Multitrigger Insurance Structures
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Contingent Cover
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The Emerging Role of Patent Law in Risk Finance
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Critical Distinctions between Weather Derivatives and Insurance
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Is Insurance a Substitute for Capital under the Revised Basel Accord?
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Is My SPE a VIE under FIN46R, and, If So, So What?
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Credit Derivatives, Insurance, and CDOs: The Aftermath of Enron
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Project Finance Collateralized Debt Obligations: What? Why? Now?
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2004 Review of Trends in Insurance Securitization: Exploring Outside the Cat Box
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Enterprise Risk Management: The Case of United Grain Growers
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Representations and Warranties Insurance and Other Insurance Products Designed to Facilitate Corporate Transactions
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Commonly Used Abbreviations
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Notes
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References
