
The use of insurance policies to mitigate operational risk 233
Note should also be taken of an eventual operational risk loss equity put. It enables
its buyers to fund losses by issuing new securities at a pre-loss price. Other risks
addressed by insurance or derivatives are: bandwidth price risk in emerging
telecommunications markets, and water price risk in emerging water markets. These
are basically market risks that can morph into operational risks.
A critical computation in this connection is to estimate the future stream of
insurance premiums that the company is likely to pay, including those for operational
risk. Different scenarios should be ...