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- Title
Corporate Bond Insurance: Feasibility and Insurer Risk Assessment.
- Authors
Spahr, Ronald W.; Sunderman, Mark A.; Amalu, Chukwaka D.
- Abstract
Bond insurance for municipalities has been available for more than ten years; however, corporate bond insurance has only recently received attention from potential insurers. This article uses a model to assess the pure risk premium for corporate bond insurance where both nonzero correlation between frequency and severity and nonzero correlation between individual risk units are allowed. The results suggest that corporate bond risk insurance could be offered by a third party insurer at a lower cost than the prevailing market default risk premium.
- Subjects
BOND insurance; BUSINESS insurance; INVESTMENT guaranty insurance; MUNICIPAL bonds; INSURANCE companies; RISK assessment; RISK premiums; INSURANCE premiums
- Publication
Journal of Risk & Insurance, 1991, Vol 58, Issue 3, p418
- ISSN
0022-4367
- Publication type
Article
- DOI
10.2307/253400