How Disaster in Japan Impacts the Insurance-Linked Securities Market

LONDON, March 22, 2011 /PRNewswire/ -- The recent earthquake and tsunami have caused terrible devastation in Japan. In addition to the loss of life and human suffering, this catastrophe has resulted in massive economic damage.

Part of the economic losses will be absorbed by the insurance industry.  Investors in insurance-linked securities such as catastrophe ("cat") bonds are also likely to be affected. Cat bonds with potential exposure to Japanese earthquake peril have been sponsored by companies such as Swiss Re, Munich Re and Platinum Underwriters. This catastrophic event is an important test of insurance-linked securities as an asset class and risk transfer mechanism.

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, insurance securitization and reinsurance, offers a comprehensive guide to the products bridging 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.  Securities linked to both property/casualty and mortality/longevity risks are covered. The book is broadly focused and covers a wide range of insurance-linked securities, including cat bonds, insurance derivatives, industry loss warranties, collateralised reinsurance, reinsurance sidecars, value-in-force securities, life settlements, longevity-linked securities, and other financial instruments.

Sharing his deep expertise as an insurance and investment professional, Alex Krutov provides insights into techniques for analysing insurance-linked securities and discusses principles for managing portfolios of insurance risk, including portfolio optimization. The author places a particular emphasis on catastrophe insurance risk.

Krutov also looks at insurance securitisation from the point of view of insurance and reinsurance companies, analysing direct transfer of insurance risk to the capital markets in the context of effective risk and capital management.

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

About Risk Books

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

SOURCE Risk Books