{"product_id":"alternative-risk-transfer-isbn-9780470857458","title":"Alternative Risk Transfer","description":"A practical approach to ART-an alternative method by which companies take on various types of risk\u003cbr\u003e This comprehensive book shows readers what ART is, how it can be used to mitigate risk, and how certain instruments\/structures associated with ART should be implemented. Through numerous examples and case studies, readers will learn what actually works and what doesn't when using this technique.\u003cbr\u003e Erik Banks (CT) joined XL Capital's weather\/energy risk management subsidiary, Element Re, as a Partner and Chief Risk Officer in 2001. \u003cp\u003eAcknowledgements ix\u003c\/p\u003e \u003cp\u003eBiography xi\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART I: RISK AND THE ART MARKET 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e1 Overview of Risk Management 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e1.1 Risk and return 3\u003c\/p\u003e \u003cp\u003e1.2 Active risk management 5\u003c\/p\u003e \u003cp\u003e1.2.1 Risk management processes 6\u003c\/p\u003e \u003cp\u003e1.2.2 Risk management techniques 7\u003c\/p\u003e \u003cp\u003e1.2.3 General risk management considerations 10\u003c\/p\u003e \u003cp\u003e1.3 Risk concepts 12\u003c\/p\u003e \u003cp\u003e1.3.1 Expected value and variance 12\u003c\/p\u003e \u003cp\u003e1.3.2 Risk aversion 14\u003c\/p\u003e \u003cp\u003e1.3.3 Risk transfer and the insurance mechanism 16\u003c\/p\u003e \u003cp\u003e1.3.4 Diversification and risk pooling 17\u003c\/p\u003e \u003cp\u003e1.3.5 Hedging 20\u003c\/p\u003e \u003cp\u003e1.3.6 Moral hazard, adverse selection and basis risk 21\u003c\/p\u003e \u003cp\u003e1.3.7 Non-insurance transfers 22\u003c\/p\u003e \u003cp\u003e1.4 Outline of the book 22\u003c\/p\u003e \u003cp\u003e\u003cb\u003e2 Risk Management Drivers: Theoretical Motivations, Benefits, and Costs 25\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e2.1 Maximizing enterprise value 25\u003c\/p\u003e \u003cp\u003e2.2 The decision framework 29\u003c\/p\u003e \u003cp\u003e2.2.1 Replacement and abandonment 31\u003c\/p\u003e \u003cp\u003e2.2.2 Costs and benefits of loss control 31\u003c\/p\u003e \u003cp\u003e2.2.3 Costs and benefits of loss financing 32\u003c\/p\u003e \u003cp\u003e2.2.4 Costs and benefits of risk reduction 35\u003c\/p\u003e \u003cp\u003e2.3 Coping with market cycles 35\u003c\/p\u003e \u003cp\u003e2.3.1 Insurance pricing 35\u003c\/p\u003e \u003cp\u003e2.3.2 Hard versus soft markets 37\u003c\/p\u003e \u003cp\u003e2.4 Accessing new risk capacity 42\u003c\/p\u003e \u003cp\u003e2.5 Diversifying the credit risk of intermediaries 43\u003c\/p\u003e \u003cp\u003e2.6 Managing enterprise risks intelligently 44\u003c\/p\u003e \u003cp\u003e2.7 Reducing taxes 45\u003c\/p\u003e \u003cp\u003e2.8 Overcoming regulatory barriers 46\u003c\/p\u003e \u003cp\u003e2.9 Capitalizing on deregulation 47\u003c\/p\u003e \u003cp\u003e\u003cb\u003e3 The ART Market and its Participants 49\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e3.1 A definition of ART 49\u003c\/p\u003e \u003cp\u003e3.2 Origins and background of ART 51\u003c\/p\u003e \u003cp\u003e3.3 Market participants 52\u003c\/p\u003e \u003cp\u003e3.3.1 Insurers and reinsurers 53\u003c\/p\u003e \u003cp\u003e3.3.2 Investment, commercial, and universal banks 55\u003c\/p\u003e \u003cp\u003e3.3.3 Corporate end-users 56\u003c\/p\u003e \u003cp\u003e3.3.4 Investors\/capital providers 57\u003c\/p\u003e \u003cp\u003e3.3.5 Insurance agents and brokers 57\u003c\/p\u003e \u003cp\u003e3.4 Product and market convergence 58\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART II: INSURANCE AND REINSURANCE 61\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e4 Primary Insurance\/Reinsurance Contracts 63\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e4.1 Insurance concepts 63\u003c\/p\u003e \u003cp\u003e4.2 Insurance and loss financing 64\u003c\/p\u003e \u003cp\u003e4.3 Primary insurance contracts 65\u003c\/p\u003e \u003cp\u003e4.3.1 Maximum risk transfer contracts 65\u003c\/p\u003e \u003cp\u003e4.3.2 Minimal risk transfer contracts 66\u003c\/p\u003e \u003cp\u003e4.3.3 Layered insurance coverage 76\u003c\/p\u003e \u003cp\u003e4.4 Reinsurance and retrocession contracts 78\u003c\/p\u003e \u003cp\u003e4.4.1 Facultative and treaty reinsurance 81\u003c\/p\u003e \u003cp\u003e4.4.2 Quota share, surplus share, excess of loss, and reinsurance pools 81\u003c\/p\u003e \u003cp\u003e4.4.3 Finite reinsurance 86\u003c\/p\u003e \u003cp\u003e\u003cb\u003e5 Captives 89\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e5.1 Using captives to retain risks 89\u003c\/p\u003e \u003cp\u003e5.1.1 Background and function 89\u003c\/p\u003e \u003cp\u003e5.1.2 Benefits and costs 91\u003c\/p\u003e \u003cp\u003e5.2 Forms of captives 94\u003c\/p\u003e \u003cp\u003e5.2.1 Pure captives 94\u003c\/p\u003e \u003cp\u003e5.2.2 Sister captives 95\u003c\/p\u003e \u003cp\u003e5.2.3 Group captives 95\u003c\/p\u003e \u003cp\u003e5.2.4 Rent-a-captives and protected cell companies 96\u003c\/p\u003e \u003cp\u003e5.2.5 Risk retention groups 99\u003c\/p\u003e \u003cp\u003e5.3 Tax consequences 100\u003c\/p\u003e \u003cp\u003e\u003cb\u003e6 Multi-risk Products 103\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e6.1 Multiple peril products 103\u003c\/p\u003e \u003cp\u003e6.2 Multiple trigger products 106\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART III: CAPITAL MARKETS 113\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e7 Capital Markets Issues and Securitization 115\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e7.1 Overview of securitization 115\u003c\/p\u003e \u003cp\u003e7.2 Insurance-linked securities 116\u003c\/p\u003e \u003cp\u003e7.2.1 Overview 116\u003c\/p\u003e \u003cp\u003e7.2.2 Costs and benefits 118\u003c\/p\u003e \u003cp\u003e7.3 Structural features 119\u003c\/p\u003e \u003cp\u003e7.3.1 Issuing vehicles 119\u003c\/p\u003e \u003cp\u003e7.3.2 Triggers 121\u003c\/p\u003e \u003cp\u003e7.3.3 Tranches 123\u003c\/p\u003e \u003cp\u003e7.4 Catastrophe bonds 124\u003c\/p\u003e \u003cp\u003e7.4.1 Hurricane 124\u003c\/p\u003e \u003cp\u003e7.4.2 Earthquake 127\u003c\/p\u003e \u003cp\u003e7.4.3 Windstorm 129\u003c\/p\u003e \u003cp\u003e7.4.4 Multiple cat peril ILS and peril by tranche ILS 129\u003c\/p\u003e \u003cp\u003e7.4.5 Bond\/derivative variations 130\u003c\/p\u003e \u003cp\u003e7.5 Other insurance-linked securities 131\u003c\/p\u003e \u003cp\u003e\u003cb\u003e8 Contingent Capital Structures 135\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e8.1 Creating post-loss financing products 135\u003c\/p\u003e \u003cp\u003e8.2 Contingent debt 139\u003c\/p\u003e \u003cp\u003e8.2.1 Committed capital facilities 139\u003c\/p\u003e \u003cp\u003e8.2.2 Contingent surplus notes 140\u003c\/p\u003e \u003cp\u003e8.2.3 Contingency loans 141\u003c\/p\u003e \u003cp\u003e8.2.4 Financial guarantees 142\u003c\/p\u003e \u003cp\u003e8.3 Contingent equity 142\u003c\/p\u003e \u003cp\u003e8.3.1 Loss equity puts 143\u003c\/p\u003e \u003cp\u003e8.3.2 Put protected equity 146\u003c\/p\u003e \u003cp\u003e\u003cb\u003e9 Insurance Derivatives 149\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e9.1 Derivatives and ART 149\u003c\/p\u003e \u003cp\u003e9.2 General characteristics of derivatives 150\u003c\/p\u003e \u003cp\u003e9.3 Exchange-traded insurance derivatives 156\u003c\/p\u003e \u003cp\u003e9.3.1 Exchange-traded catastrophe derivatives 156\u003c\/p\u003e \u003cp\u003e9.3.2 Exchange-traded temperature derivatives 157\u003c\/p\u003e \u003cp\u003e9.4 OTC insurance derivatives 162\u003c\/p\u003e \u003cp\u003e9.4.1 Catastrophe reinsurance swaps 162\u003c\/p\u003e \u003cp\u003e9.4.2 Pure catastrophe swaps 164\u003c\/p\u003e \u003cp\u003e9.4.3 Temperature derivatives 164\u003c\/p\u003e \u003cp\u003e9.4.4 Other weather derivatives 166\u003c\/p\u003e \u003cp\u003e9.4.5 Credit derivatives 167\u003c\/p\u003e \u003cp\u003e9.5 Bermuda transformers and capital markets subsidiaries 168\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART IV: ART OF THE FUTURE 171\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e10 Enterprise Risk Management 173\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e10.1 Combining risks 173\u003c\/p\u003e \u003cp\u003e10.1.1 The enterprise risk management concept 173\u003c\/p\u003e \u003cp\u003e10.1.2 Costs and benefits 177\u003c\/p\u003e \u003cp\u003e10.2 Developing an enterprise risk management program 179\u003c\/p\u003e \u003cp\u003e10.2.1 Strategic and governance considerations 180\u003c\/p\u003e \u003cp\u003e10.2.2 Program blueprint 182\u003c\/p\u003e \u003cp\u003e10.2.3 Program costs 186\u003c\/p\u003e \u003cp\u003e10.3 End-user demand 188\u003c\/p\u003e \u003cp\u003e\u003cb\u003e11 Prospects for Growth 193\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e11.1 Drivers of growth 193\u003c\/p\u003e \u003cp\u003e11.2 Barriers to growth 194\u003c\/p\u003e \u003cp\u003e11.3 Market segments 196\u003c\/p\u003e \u003cp\u003e11.3.1 Finite structures 196\u003c\/p\u003e \u003cp\u003e11.3.2 Captives 197\u003c\/p\u003e \u003cp\u003e11.3.3 Multi-risk products 197\u003c\/p\u003e \u003cp\u003e11.3.4 Capital markets issues 198\u003c\/p\u003e \u003cp\u003e11.3.5 Contingent capital 198\u003c\/p\u003e \u003cp\u003e11.3.6 Insurance derivatives 199\u003c\/p\u003e \u003cp\u003e11.3.7 Enterprise risk management 199\u003c\/p\u003e \u003cp\u003e11.4 End-user profiles 201\u003c\/p\u003e \u003cp\u003e11.5 Future convergence 202\u003c\/p\u003e \u003cp\u003eGlossary 205\u003c\/p\u003e \u003cp\u003eSelected References 221\u003c\/p\u003e \u003cp\u003eIndex 223\u003c\/p\u003e  \u003cb\u003eERIK BANKS\u003c\/b\u003e has held senior risk management positions at several global financial institutions, including XL Capital, where he was Partner and Chief Risk Officer of the Bermuda reinsurer's derivative subsidiary, and Merrill Lynch, where he spent 13 years managing credit and market risk teams in Tokyo, Hong Kong, London and New York. Mr. Banks has written various books on risk management, emerging markets, derivatives, merchant banking, and electronic finance. \u003cbr\u003e  The Alternative Risk Transfer (ART) market has expanded in recent years to become a vital source of risk solutions and risk capacity and an important mechanism for the creation of integrated corporate risk management programs.   \u003cp\u003eThe ART market unites the risk management and product development skills of financial institutions, insurers and reinsurers with the capital of global investors to give corporate risk managers the best possible means of managing financial and operating risks. In a time when natural and man-made disasters and financial volatility are constantly present, the need for dependable, equitably priced risk capacity and innovative, holistic risk solutions has never been greater. The ART market, which can supply both, is thus becoming an integral component of the 21st century financial markets.\u003c\/p\u003e \u003cp\u003e\u003ci\u003eAlternative Risk Transfer\u003c\/i\u003e, written by a veteran of the banking and insurance industries, provides a practical, detailed and up-to-date review of the topic. The text is divided into four parts, including\u003c\/p\u003e \u003cul\u003e \u003cli\u003e \u003cdiv\u003eRisk and the ART market \u003c\/div\u003e \u003c\/li\u003e \u003cli\u003e \u003cdiv\u003e Insurance and Reinsurance\u003c\/div\u003e \u003c\/li\u003e \u003cli\u003e \u003cdiv\u003eCapital Markets\u003c\/div\u003e \u003c\/li\u003e \u003cli\u003e \u003cdiv\u003eEnterprise Risk Management and the Future of ART\u003c\/div\u003e \u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eThe book contains numerous worked examples and case studies to place the subject in a practical light, and is ideal reading for CFOs, corporate risk managers, treasurers, institutional investors and fund managers seeking to understand the ART market.\u003cbr\u003e \u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47988716536037,"sku":"NP9780470857458","price":146.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780470857458.jpg?v=1761781309","url":"https:\/\/k12savings.com\/es\/products\/alternative-risk-transfer-isbn-9780470857458","provider":"K12savings","version":"1.0","type":"link"}