Risk financing
Encyclopedia
In business economics
, risk financing is concerned with providing funds to cover the financial effect of unexpected losses experienced by a firm.
Traditional forms of finance include risk transfer, funded retention by way of reserves (often called self insurance) and risk pooling.
Alternative risk finance is the use of products and solutions which have grown out of the convergence of the banking and insurance industry. They include captive insurance companies and catastrophic bonds, and finite risk products such loss portfolio transfers and adverse development covers. Professor Lawrence A. Cunningham
of George Washington University suggests adapting cat bonds to the risks that large auditing firms face in cases asserting massive securities law damages.
Business economics
Business economics as a field in applied economics uses economic theory and quantitative methods to analyze business enterprises and the factors contributing to the diversity of organizational structures and the relationships of firms with labour, capital and product markets...
, risk financing is concerned with providing funds to cover the financial effect of unexpected losses experienced by a firm.
Traditional forms of finance include risk transfer, funded retention by way of reserves (often called self insurance) and risk pooling.
Alternative risk finance is the use of products and solutions which have grown out of the convergence of the banking and insurance industry. They include captive insurance companies and catastrophic bonds, and finite risk products such loss portfolio transfers and adverse development covers. Professor Lawrence A. Cunningham
Lawrence A. Cunningham
Lawrence A. Cunningham is an American author of corporate governance and investing books and is Henry St. George Tucker III Research Professor of Law at George Washington University.-Life:...
of George Washington University suggests adapting cat bonds to the risks that large auditing firms face in cases asserting massive securities law damages.