Securitization of Life Insurance Assets and Liabilities

Securitization is one of the most important innovations of modern finance. The securitization process involves the isolation of a pool of assets or rights to a set of cash flows and the repackaging of the asset or cash flows into securities that are traded in capital markets. The objective of this a...

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Veröffentlicht in:The Journal of risk and insurance 2005-06, Vol.72 (2), p.193-226
Hauptverfasser: Cowley, Alex, Cummins, J. David
Format: Artikel
Sprache:eng
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Zusammenfassung:Securitization is one of the most important innovations of modern finance. The securitization process involves the isolation of a pool of assets or rights to a set of cash flows and the repackaging of the asset or cash flows into securities that are traded in capital markets. The objective of this article is to analyze securitization in the insurance industry with an emphasis on the lessons to be learned from prior securitizations as well as techniques that can be employed to mitigate the remaining impediments to the more widespread securitization of insurance risk. The article begins with an overview and analysis of asset-backed securities. This is followed by a discussion of securitization as a potential source of value creation in the insurance industry. The principal life insurance and annuity securitizations that have been conducted in recent years are then analyzed, followed by a discussion of possible approaches to overcoming impediments to securitization.
ISSN:0022-4367
1539-6975
DOI:10.1111/j.1539-6975.2005.00121.x