
210 Operational Risk Control
䊏 A significant difference with insurers is that the stress of technical risk on economic
capital is long term.
The merging of financial instruments and insurance changes the perspective of
technical risk at the frontline of the insurance industry. One of the policies insurers
borrowed from bankers is securitization. They offer investors event risk oriented
securitized instruments with their value linked to natural catastrophes. Hurricane
derivatives are an example of catastrophe instruments which, through the capital
markets, have gone public.
By all evidence, in the coming years we can expect a lot of insurance derivatives, ...