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
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).
We hope the you have a better understanding of the meaning of Securitization of Risk.