Capital Market Risk Financing Plans

Level: Intermediate

Why you need this learning module:
After completing this learning module, you’ll be able to consider the use of capital market products as a way to provide your organization with a strategic advantage.

Upon successful completion of this learning module, you should be able to:

• Describe the types of capital market products.
• Explain how securitization operates.
• Explain how insurance securitization operates, including:
• The use of catastrophe bonds
• The benefits to investors
• The advantages and disadvantages of insurance securitization
• Explain how insurance derivatives operate, including:
• The use of forwards and futures contracts
• The use of swaps
• The use of insurance options
• The advantages and disadvantages of insurance derivatives
• Explain how contingent capital arrangements operate, including:
• The use of a standby credit facility
• The use of a contingent surplus note arrangement
• The use of a catastrophe equity put arrangement
• The advantages and disadvantages of contingent capital arrangements
• Analyze the concerns of organizations transferring risk and investors supplying capital.
• Explain the regulatory and accounting issues involved with insurance linked securities and insurance derivatives.

Cost: $20 per Professional Development Hour (PDH). Information on Professional Development Hours (PDH) provided can be found here.

Capital Market Risk Financing Plans Topics Include:

• Types of capital market products
• How insurance securitization operates, including the use of catastrophe bonds, the benefits to investors, and the advantages and disadvantages of insurance securitization
• How insurance derivatives operate, including the use of forwards and futures contracts, the use of swaps, the use of insurance options, and the advantages and disadvantages of insurance derivatives
• How contingent capital arrangements operate, including the use of a standby credit facility, the use of a contingent surplus note arrangement, the use of a catastrophe equity put arrangement, and the advantages and disadvantages of contingent capital arrangements
• Concerns of organizations transferring risk and investors supplying capital
• Regulatory and accounting issues involved with insurance linked securities and insurance derivatives

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