Global trends favouring alternative reinsurance concepts : Focus on shareholder value, Deregulation and consolidation of insurance markets, Higher risk retention and restructuring of reinsurance programmes, Innovative risk management, Desire to get away from cyclical pricing, Shortage of capacity for certain types of risk, Transparent accounting and disclosure of earnings volatility, Convergence of insurance and capital markets
ART and financing concepts and techniques can be differentiated in accordance with the following dimensions: goal, market, products and risk type.
Prospective finite risk reinsurance covers the contingencies associated with future loss events.
Retrospective finite risk reinsurance covers insulate insurance companies from the negative impact of an adverse loss development and/or from the accelerated payout of losses already incurred at inception of the cover.
The risk transfer of exclusively financial, credit/weather-related or other capital market risks from capital to insurance markets is structured in the form of a (re)insurance solution. This concept is also called 'Insuratization'.
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