The guys go deep into alternative risk transfer this week, discussing insurance-linked securities (ILS), cat bonds, and why re/insurers may choose different ways to mitigate risk other than traditional reinsurance deals. This episode is also packed with analogies, including one from ChatGPT!
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OUTLINE & TIMESTAMPS:
(00:00) Intro
(02:57) Jerad’s Analogy for Alternative Risk Transfer
(06:18) ChatGPT’s Analogy for Alternative Risk Transfer
(08:31) Ben’s Analogy for Alternative Risk Transfer
(10:02) Insurance Linked Securities (ILS) Explained
(15:22) Concerns With ILS Compared to Traditional Reinsurance
(17:58) Drivers of ILS Purchasing, Cat Bonds, & Capacity Constraints
(19:48) Basis Risk: Indemnity Triggers & Parametric Coverage
(22:22) Traditional Reinsurance Vs. Alternative Risk Transfer
(26:15) Brokers Using Creativity to Solve Client Problems
(28:25) Insurance Add-Ons, Protections, & Exclusions
