Session: 21, 43

Financial Risk/General Reinsurance

* * *

Summary

Increasingly popular are sophisticated risk management techniques that allow ceding corporations to retain more risk than can be achieved through conventional insurance contracts, while efficiently protecting the earnings statement and balance sheet. Two key areas covered in this session will be finite risk reinsurance and contingent capital solutions.

One panelist will provide an international overview on finite risk reinsurance, discussing: (1) the basic structures being employed, (2) finite's cross border opportunities and applications (including accounting arbitrage, tax implications, political risk, and benefits for multinational corporations), and (3) the regulations and accounting rules which may come into play.

The other panelist will present an example of how a corporation can be indemnified for loss, not through insurance, but rather a contingent capital arrangement. He will use a real-life example to demonstrate how a loss-triggering event can inject new capital funding into a corporation, what considerations affect its pricing, what impact it has on a corporation's financials, and what advantages and disadvantages there are relative to insurance.

* * *

Tobias got his Ph.D. in mathematics from the Swiss Federal Institute of technology (ETH) in 1996. He then spent two years abroad (US and France) as a post-doc, before he joined Zurich Re in August 1998. Subsequently he moved on to Swiss Re in December 2000 where he is now a pricing actuary for the Risk Solutions department. There he is mainly involved in the pricing of Finite as well as Contingent Capital and Project Finance Transactions.

* * *