In 2002, Swiss Re, the world’s second – largest insurance company is considering securitization of part of its risk portfolio in the capital markets. This would be a first for the company, which until then had never risk from its balance sheet to be transferred. Peter Giessmann, Head of Retrocession Group, is considering catastrophe bonds as a way of transferring risk. “Cat bonds” are securities whose payments depend on the probability of a disaster occur, such as an earthquake or hurricane. Thi … Read more »

In 2002, Swiss Re, the world’s second – largest insurance company is considering securitization of part of its risk portfolio in the capital markets. This would be a first for the company, which until then had never risk from its balance sheet to be transferred. Peter Giessmann, Head of Retrocession Group, is considering catastrophe bonds as a way of transferring risk. “Cat bonds” are securities whose payments depend on the probability of a disaster occur, such as an earthquake or hurricane. This case describes the traditional reinsurance market and securitization efforts that have taken place in the past and then focuses on Swiss Re’s decision as a sell-side participants in the cat bond market.
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from
George Chacko,
Vincent Dessain,
Unlike Sjoman,
Peter Hecht
Source: Harvard Business School
23 pages.
Release Date: 02 September 2004. Prod #: 205006-PDF-ENG
Catastrophe Bonds at Swiss Re HBR case solution