Publication:
Combining Insurance, Contingent Debt, and Self-Retention in an Optimal Corporate Risk Financing Strategy

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dc.contributor.authorGurenko, Eugene
dc.contributor.authorMahul, Olivier
dc.date.accessioned2014-04-17T19:06:09Z
dc.date.available2014-04-17T19:06:09Z
dc.date.issued2003-11
dc.description.abstractThe authors provide a conceptual framework for designing a comprehensive risk financing strategy for a firm, using an optimal combination of three instruments: self-retention, contingent debt, and insurance. Using an original conceptual model, the risk management decisions of the firm are first decomposed into two sets-choosing attachment points for each layer of financing used in the overall risk financing structure, and, then determining optimal risk allocation arrangements within each layer of risk. This model allows the authors to show how these optimal risk financing arrangements are driven by the costs of risk management instruments, the risk characteristics, and the firm's borrowing constraints. Finally, the authors provide an original perspective to think about optimal ex ante risk management strategies, based on a combination of insurance, savings, and credit at the microeconomic or macroeconomic levels.en
dc.identifierhttp://documents.worldbank.org/curated/en/2003/11/2813253/combining-insurance-contingent-debt-self-retention-optimal-corporate-risk-financing-strategy
dc.identifier.doi10.1596/1813-9450-3167
dc.identifier.urihttps://hdl.handle.net/10986/17904
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 3167
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectADMINISTRATIVE COSTS
dc.subjectAGENTS
dc.subjectATTACHMENT POINT
dc.subjectBALANCE SHEET
dc.subjectBORROWING
dc.subjectBORROWING CONSTRAINTS
dc.subjectBUSINESS CYCLES
dc.subjectCAPITAL MARKETS
dc.subjectCATASTROPHIC RISKS
dc.subjectCOINSURANCE
dc.subjectCONCEPTUAL FRAMEWORK
dc.subjectCONTRACTUAL SAVINGS
dc.subjectCOVERAGE
dc.subjectDEBT
dc.subjectDEBT CAPACITY
dc.subjectDECISION MAKING
dc.subjectDEFAULT RISK
dc.subjectECONOMIC BEHAVIOR
dc.subjectECONOMICS
dc.subjectECONOMISTS
dc.subjectEQUITY CAPITAL
dc.subjectFINANCIAL INTERMEDIARIES
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL SERVICES
dc.subjectINCOME
dc.subjectINDEMNITY
dc.subjectINFORMATION ASYMMETRIES
dc.subjectINSURANCE
dc.subjectINSURANCE COVERAGE
dc.subjectINSURANCE INDUSTRY
dc.subjectINSURANCE PRODUCTS
dc.subjectINSURANCE RATES
dc.subjectINSURED LOSSES
dc.subjectINSURERS
dc.subjectMICROFINANCE
dc.subjectMICROINSURANCE
dc.subjectPROBABILITY OF DEFAULT
dc.subjectPROFITABILITY
dc.subjectPROGRAMS
dc.subjectREINSURANCE
dc.subjectRESERVES
dc.subjectRETAINED EARNINGS
dc.subjectRISK ALLOCATION
dc.subjectRISK AVERSION
dc.subjectRISK MANAGEMENT
dc.subjectRISK MANAGERS
dc.subjectRISK PREMIUM
dc.subjectRISK SHARING
dc.subjectRISK TRANSFER
dc.subjectTRADEOFFS INSURANCE INDUSTRY
dc.subjectFINANCING PLANS
dc.subjectRISK MANAGEMENT
dc.subjectCONTINGENCY FINANCING
dc.subjectDEBT FINANCING
dc.subjectCORPORATE FINANCE
dc.subjectSELF FINANCING
dc.subjectRISK ASSESSMENT
dc.subjectCOST FUNCTIONS
dc.subjectBORROWING COSTS
dc.subjectSAVINGS BEHAVIOR
dc.subjectACCESS TO CREDIT
dc.subjectMICROECONOMICS
dc.subjectMACROECONOMIC CONTEXT
dc.subjectTRADEOFFS
dc.titleCombining Insurance, Contingent Debt, and Self-Retention in an Optimal Corporate Risk Financing Strategyen
dspace.entity.typePublication
okr.crossref.titleCombining Insurance, Contingent Debt, and Self-Retention in an Optimal Corporate Risk Financing Strategy
okr.date.doiregistration2025-04-10T09:16:13.661576Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2003/11/2813253/combining-insurance-contingent-debt-self-retention-optimal-corporate-risk-financing-strategy
okr.globalpracticeFinance and Markets
okr.globalpracticeGovernance
okr.guid564171468761960143
okr.identifier.doi10.1596/1813-9450-3167
okr.identifier.externaldocumentum000012009_20031208152207
okr.identifier.internaldocumentum2813253
okr.identifier.reportWPS3167
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2003/12/08/000012009_20031208152207/Rendered/PDF/WPS3167.pdfen
okr.themeFinancial and private sector development :: Corporate governance
okr.themeFinancial and private sector development :: Other financial and private sector development
okr.topicInsurance and Risk Mitigation
okr.topicBanks and Banking Reform
okr.topicFinance and Financial Sector Development::Financial Intermediation
okr.topicEnvironmental Economics and Policies
okr.topicPayment Systems and Infrastructure
okr.topicLaw and Development::Insurance Law
okr.unitOff of Sr VP Dev Econ/Chief Econ (DECVP)
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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