Securitization of Risk

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What does Securitization of Risk mean? Read on to discover the definition & meaning of the term Securitization of Risk - to help you better understand the language used in insurance policies.

Securitization of Risk

Securitization of Risk

The practice of converting known potential risk scenarios, such as the potential for a hurricane, into a marketable security. The best example to date is the "cat bond," a bond future (commodity) traded on the Chicago Board of Trade (CBOT).

More Insurance Terms And Definitions

The Merriam-Webster Dictionary defines insurance as:

a: The business of insuring persons or property.

b: Coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.

c: The sum for which something is insured.

We hope the you have a better understanding of the meaning of Securitization of Risk. If you are looking for the meanings of other important insurance terms and their definitions, just click on the letter below to find the words & concepts you are looking for:

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