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Advantages of finite‐structured environmental insurance policies
Author(s) -
Murphy Michael J.,
Renshaw Reynolds B.
Publication year - 2001
Publication title -
remediation journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 27
eISSN - 1520-6831
pISSN - 1051-5658
DOI - 10.1002/rem.1030
Subject(s) - business , convergence (economics) , financial market , financial risk , investment (military) , finance , inflation (cosmology) , risk analysis (engineering) , actuarial science , economics , macroeconomics , physics , politics , theoretical physics , political science , law
Over the last five years, insurance products have been expanded to assist companies better manage environmentalliabilities. The most progressive of these products is a finite‐structured program whereby the convergenceof insurance and financial markets expand the meaning of “alternative risk transfer.” Finite programsblend financial markets and banking concepts with risk transfer concepts to more effectively and efficiently allowthe insured to manage the financial implications of its environmental liabilities. This article presents theadvantages of using finite‐structured environmental insurance policies and discusses how potential insuredscan protect against several types of remediation project risks, including cleanup costs, inflation uncertainty,and variability in investment returns. © 2001 John Wiley & Sons, Inc.