Alternative risk financing may mean two things: a) Traditional products used in a non-traditional manner or b) Non-insurance financial products that mitigate risk
Alternative risk financing products can be divided roughly into two principal categories: Alternatives to insurance companies and Alternatives to insurance products
CAT bonds are most frequently used where the risk sought to be defrayed is a high-severity, low-frequency event.
Difinition - Weather derivatives are financial instruments that can be used by companies as part of a risk management strategy to reduce the risk associated with adverse or unexpected weather conditions.
Alternative risk financing may mean traditional products used in a non-traditional manner or non-insurance financial products tha mitigate risk. They are sophisticated risk financing and transfer products.
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