As a rule – issued by insurance companies – mainly through special purpose vehicles set up for this purpose – high interest bearing securities – usually limited to relatively short periods of time – often also divided into tranches. They are – related to very specific loss events – such as losses from storms in Europe or earthquakes in Japan. If the loss event occurs, the value of the bond falls to a maximum of zero. Until now, such bonds have been almost entirely underwritten by hedge funds, but recently they have also been offered to wealthy individuals. – See hell-and-flood contract, hurricane shock, insurance-linked securities, retrocession, risk appetite, risk sharing, single hedge fund, terror paper, weather derivative, XXXinsurance-linked securities, tremor premium.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/