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Financial Risk

In relation to insurance and insurance contracts, financial risk refers to the type of risk that affects a contract's future...

Risky Asset Substitution

The process that an insurance firm undertakes to substitute the components of its portfolios with highly risky assets such as...

PI

An acronym for portfolio insurance; a type of capital protection product that has no cap placed on its performance, while...

Portfolio Insurance

A type of capital protection product that has no cap placed on its performance, while typically offering synthetic participation in...

DAC

It stands for deferred acquisition costs; with respect to an insurance contract, it is a measure of cost that constitutes...

Deferred Acquisition Costs

With respect to an insurance contract, it is a measure of cost that constitutes deferred sales costs (acquisition costs) that...

CSM

It stands for contractual service margin; the unearned profit that an insurance firm expects to earn from the services it...

Contractual Service Margin

The unearned profit that an insurance firm expects to earn from the services it provides. Many insurance firms usually recognize...

Acquisition Costs

In relation to insurance, it constitutes the direct costs an insurer incurs to "acquire" the premium— such as fees and...

Underwriting

The process of evaluating (by an underwriter) the risk that an insurer would be exposed to in connection with a...