The aim of this paper is to examine the impact of capital and risk transfer instruments on diversification and insolvency risk in a parent-subsidiary relationship. To better assess the effects, we compare this setting to the case of a holding company and an integrated financial group. In the...

Participating life insurance contracts typically contain various types of implicit options. These implicit options can be very valuable and can thus represent a sig-nificant risk to the insurance companies issuing these contracts in case of in-sufficient risk management. Options can get...