Reinsurance Sidecar


Reinsurance Sidecar
A limited purpose company created to work in tandem with insurance companies. Reinsurance sidecars will purchase a portion or all of an insurance policy from an insurance company to share in the profits and risks. If the underwritten policies have low claim rates while in possession of the sidecar, the investors will make higher returns.

Sidecars are used as a way to increase the original underwriter's business while reducing liabilities. The reinsuring company sometimes sets up a type of insurance investment vehicle, called sidecars, for investors who lack underwriting experience. The investors' funds are used by the reinsuring company to underwrite a portion or all of an existing policy from a separate company for a percentage of the premiums.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Reinsurance sidecar — Reinsurance sidecars, conventionally referred to as Sidecars, are financial structures which are created to allow investors to take on the risk and return of a group of insurance policies (a book of business ) written by an insurer or reinsurer… …   Wikipedia

  • Reinsurance — is a means by which an insurance company can protect itself against the risk of losses with other insurance companies. Individuals and corporations obtain insurance policies to provide protection for various risks (hurricanes, earthquakes,… …   Wikipedia

  • Alternative Risk Transfer — (often referred to as ART) is the use of techniques other than traditional insurance and reinsurance to provide risk bearing entities with coverage or protection. The field of ART grew out of a series of insurance capacity crises in the 1970s… …   Wikipedia

  • Catastrophe bond — Catastrophe bonds (also known as cat bonds) are risk linked securities that transfer a specified set of risks from a sponsor to investors. They are often structured as floating rate corporate bonds whose principal is forgiven if specified trigger …   Wikipedia

  • Captive insurance — companies are insurance companies established with the specific objective of financing risks emanating from their parent group or groups but they sometimes also insure risks of the group s customers as well. Using a captive insurer is a risk… …   Wikipedia

  • Industry Loss Warranties — Industry Loss Warranties, often referred to as ILWs, are a type of reinsurance or derivative contract through which one party will purchase protection based on the total loss arising from an event to the entire insurance industry rather than… …   Wikipedia

  • International Society of Catastrophe Managers — The International Society of Catastrophe Managers (ISCM) is a professional association that promotes catastrophe management professionalism within the insurance industry. Goal and objectivesISCM s goal is to provide forums for exchange of ideas,… …   Wikipedia

  • Securitization — is a structured finance process, which involves pooling and repackaging of cash flow producing financial assets into securities that are then sold to investors. The name securitization is derived from the fact that the form of financial… …   Wikipedia


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.