Securitization of Life Insurance Assets and Liabilities

Cowley, Alex, Cummins, J. David, Journal of Risk and Insurance

INTRODUCTION

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 trading of cash flow streams enables the parties to the contract to manage and diversify risk, to take advantage of arbitrage opportunities, or to invest in new classes of risk that enhance market efficiency. The cash flow streams to be traded often involve contingent payments as well as more predictable components which may be subject to credit and other types of counterparty risk. …

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Publication information: Article title: Securitization of Life Insurance Assets and Liabilities. Contributors: Cowley, Alex - Author, Cummins, J. David - Author. Journal title: Journal of Risk and Insurance. Volume: 72. Issue: 2 Publication date: June 2005. Page number: 193+. © 2009 American Risk and Insurance Association, Inc. Provided by ProQuest LLC. All Rights Reserved.

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