In 2003, Swiss Re introduced a mortality-based security designed to hedge excessive mortality changes for its life book … of business. The concern was apparently brevity risk, i.e., the risk of premature death. The brevity risk due to a … pandemic is similar to the property risk associated with catastrophic events such as earthquakes and hurricanes and the …

, such transactions create reinsurance default risk, or the risk that captive reinsurers will default on their obligations to … the underlying insurers. Second, they can expose insurers to recapture risk, or the prospect that an insurer will no … insurance scheme. Third, shadow insurance can create correlated parent company risk by magnifying the prospect that a single …

out some key issues on how the credit risk associated to these products can be reduced and, finally, in the last section …

This study examines the potential risk reducing benefits of credit default swaps (CDS) against risk in U.S. stock … effective hedge against risk in all stock sectors. CDS also provide a safe haven in times of extreme stock market volatility and …