| Terminology . | Intuition . |
|---|---|
| Primary risk transfer | These policies are bought by businesses to manage operational risk. |
| Indemnity insurance (Section “Conventional insurance”) | A policy in which the insured’s payment is determined by the size of the loss suffered by the insured. |
| Warranty (Section “Cyber warranties”) | A guarantee that the customer will be compensated for a failure in the vendor’s product or service. |
| Parametric insurance (Section “Parametric insurance”) | A policy in which a fixed payment is triggered by a pre-defined event, independent of the insured’s loss. |
| Higher layer risk transfer | These instruments are bought/issued by (re)insurers to manage insurance portfolio risk. |
| Reinsurance (Section “Reinsurance”) | A policy bought by an insurer to cover insurance losses. |
| Retrocession | A policy bought by a reinsurer to cover reinsurance losses. |
| Quota share reinsurance | A policy in which the insurer and reinsurer share premiums and losses in a fixed proportion. |
| Excess of loss (XoL) reinsurance | A policy in which the insurer is compensated when portfolio losses exceed a specified limit. |
| Capital markets (Section “Capital markets”) | An umbrella term for (re)insurers transferring portfolio risk to public and private investors. |
| Cat bond | A fixed-income product structured so the buyer receives a lower return if a defined catastrophe occurs. |
| Terminology . | Intuition . |
|---|---|
| Primary risk transfer | These policies are bought by businesses to manage operational risk. |
| Indemnity insurance (Section “Conventional insurance”) | A policy in which the insured’s payment is determined by the size of the loss suffered by the insured. |
| Warranty (Section “Cyber warranties”) | A guarantee that the customer will be compensated for a failure in the vendor’s product or service. |
| Parametric insurance (Section “Parametric insurance”) | A policy in which a fixed payment is triggered by a pre-defined event, independent of the insured’s loss. |
| Higher layer risk transfer | These instruments are bought/issued by (re)insurers to manage insurance portfolio risk. |
| Reinsurance (Section “Reinsurance”) | A policy bought by an insurer to cover insurance losses. |
| Retrocession | A policy bought by a reinsurer to cover reinsurance losses. |
| Quota share reinsurance | A policy in which the insurer and reinsurer share premiums and losses in a fixed proportion. |
| Excess of loss (XoL) reinsurance | A policy in which the insurer is compensated when portfolio losses exceed a specified limit. |
| Capital markets (Section “Capital markets”) | An umbrella term for (re)insurers transferring portfolio risk to public and private investors. |
| Cat bond | A fixed-income product structured so the buyer receives a lower return if a defined catastrophe occurs. |
Refer to other sources for technical definitions [24,25].
| Terminology . | Intuition . |
|---|---|
| Primary risk transfer | These policies are bought by businesses to manage operational risk. |
| Indemnity insurance (Section “Conventional insurance”) | A policy in which the insured’s payment is determined by the size of the loss suffered by the insured. |
| Warranty (Section “Cyber warranties”) | A guarantee that the customer will be compensated for a failure in the vendor’s product or service. |
| Parametric insurance (Section “Parametric insurance”) | A policy in which a fixed payment is triggered by a pre-defined event, independent of the insured’s loss. |
| Higher layer risk transfer | These instruments are bought/issued by (re)insurers to manage insurance portfolio risk. |
| Reinsurance (Section “Reinsurance”) | A policy bought by an insurer to cover insurance losses. |
| Retrocession | A policy bought by a reinsurer to cover reinsurance losses. |
| Quota share reinsurance | A policy in which the insurer and reinsurer share premiums and losses in a fixed proportion. |
| Excess of loss (XoL) reinsurance | A policy in which the insurer is compensated when portfolio losses exceed a specified limit. |
| Capital markets (Section “Capital markets”) | An umbrella term for (re)insurers transferring portfolio risk to public and private investors. |
| Cat bond | A fixed-income product structured so the buyer receives a lower return if a defined catastrophe occurs. |
| Terminology . | Intuition . |
|---|---|
| Primary risk transfer | These policies are bought by businesses to manage operational risk. |
| Indemnity insurance (Section “Conventional insurance”) | A policy in which the insured’s payment is determined by the size of the loss suffered by the insured. |
| Warranty (Section “Cyber warranties”) | A guarantee that the customer will be compensated for a failure in the vendor’s product or service. |
| Parametric insurance (Section “Parametric insurance”) | A policy in which a fixed payment is triggered by a pre-defined event, independent of the insured’s loss. |
| Higher layer risk transfer | These instruments are bought/issued by (re)insurers to manage insurance portfolio risk. |
| Reinsurance (Section “Reinsurance”) | A policy bought by an insurer to cover insurance losses. |
| Retrocession | A policy bought by a reinsurer to cover reinsurance losses. |
| Quota share reinsurance | A policy in which the insurer and reinsurer share premiums and losses in a fixed proportion. |
| Excess of loss (XoL) reinsurance | A policy in which the insurer is compensated when portfolio losses exceed a specified limit. |
| Capital markets (Section “Capital markets”) | An umbrella term for (re)insurers transferring portfolio risk to public and private investors. |
| Cat bond | A fixed-income product structured so the buyer receives a lower return if a defined catastrophe occurs. |
Refer to other sources for technical definitions [24,25].
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