Insurers looking to better manage their capital requirements should in most cases issue subordinated (sub) debt rather than buying quota share reinsurance. This has been the conclusion of a study done by Towers Watson. Markus Stricker, a partner responsible for risk management at Twelve Capital, said the report’s conclusion – that debt is more of a capital management tool and reinsurance is more of a risk management tool – might have been obvious to some, but it has not stopped many insurers from using reinsurance in this manner.
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Source: Twelve Capital
Tuesday, 03 March 2015