Category: R

An insurers gross profitability. The higher the rate on a line the more gross profit.

Resources used to absorb risk in order to keep in the national regulatory requirements. Refer to economic capital, riskadjusted capital, tier 1 2 and 3 capital.

An attempt by a reinsurer who accepts the transfer of risks to expand their reinsurance portfolio. Refer to retrocedant and retrocession.

Stocks that are offered for purchase by the public by companies that have been privately purchased in an effort to reduce their debt.

Detecting actual, perceived, or anticipated financial and operating risks. Refer to risk management, risk quantification, and risk monitoring.

A safe investment model used to compare different risks of investment opportunities to determine the best choices a firm should make. Refer to discount rate and risk premium.

Assets in a bank exposed to interest rate changes. Refer to asset liability management and ratesensitive liabilities.

Reactivating insurance cancelled due to nonpayment. The insurance company has the right to charge a higher premium.

An insurance policy that covers existing and incurred but not yet reported losses up to a dollar amount. Refer to loss portfolio transfer and retrospective finite policy.

When a lender gives monthly payments to a borrower using their property equity. This is usually done by elderly homeowners resulting in the borrower eventually owning the home.

A decision guided by cost/benefit analysis made by a firm to control, retain, eliminate, or expand its risks. Refer to risk identification, risk monitoring, and risk quantification.

Presentations organized by a firm introducing a new issue of securities to possible investors. AKA dog and pony show.

Liabilities of a bank that are exposed to interest rate changes. Refer to asset liability management and ratesensitive asset.

A transaction between a related entity and a company.

An insurance policy structured as adverse development cover loss portfolio transfer, and retrospective aggregate loss cover allowing management of existing liabilities and losses. AKA postfunded policy. Refer to prospective finite policy.

When a firm repos securities from a party that pays a finance charge in agreement to sell them at a higher price at a predetermined date in the future. AKA reverse, resale,

Identifying, quantifying, managing, and monitoring financial and operating risk. Refer to risk identification, risk management, risk monitoring, and risk quantification.

The closing of an option to obtain a lower strike price. Refer to roll forward and roll up.

An option spread that creates profit from volatile circumstances. A small amount of closertothemoney options are bought than fartherfromthemoney options. Refer to backspread.

When a loan is rewritten to prevent foreclosure. This can be an extension, lowered interest, or a change in repayment schedule. AKA rescheduling or soft loan.