Bond

A bond, or fixed income investment, is a debt instrument created when investors loan capital to a corporate or government entity. These entities issue bonds to generate funds that are sufficient to finance projects or specified activities. Terms such as interest rate and investment time frame are established at the point of investment.

RMS Model Provides a New Perspective on Longevity Risk

Risk Management Solutions (RMS) is well known as a leader in the area of catastrophe modeling and analytics.  The company provides its services to a broad range of insurers, reinsurers, consultants and capital markets participants who are active in the property and casualty insurance industry.

More recently, the company has developed resources that focus on life and health risks.  Though initially focused on...

5 Reasons to Question the Recent Indexed Annuity Article in Bloomberg

An article on indexed annuities appeared in Bloomberg yesterday (click here to read).

The article is substantive and comes from a credible source.  It is provides a good explanation of why surrender fees need to be a front-and-center consideration for any consumer considering the purchase of an...

An Interview with Jack Marrion and John Olsen, Authors of Index Annuities: A Suitable Approach

Jack Marrion heads a research consultancy focused on the...

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Low Interest Rates Affecting Insurance Companies

The ultra-low interest rates that exist at the moment are affecting insurance company profitability and operations. On the profitability side, current policy premiums must be reinvested into bonds that have low yields and are fully priced. Investment income and underwriting profitability (which is often rare) are the main components of insurance company profitability. As large fixed income investors, insurance companies are challenged in the current interest rate environment. On the operations...
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Swiss Re to Issue First Longevity-Linked Cat Bond

Swiss Re is preparing to issue the first catastrophe bond linked to longevity risk . Catastrophe bonds ("cat bonds") are insurance linked securities that pass along risks to capital markets participants rather than an insurance company balance sheet. Cat bonds are more commonly structured for natural disasters such as earthquakes or hurricanes. The Swiss Re security is an eight year bond that will be based on the difference between the annualized mortality improvement in a UK-based age group...
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