Definition of "Hedging"
Method of transferring risk to permit the risk bearer to assume two offsetting positions at the same time so that, regardless of the outcome of an event, the risk bearer is left in a no win/no lose position. For example, in the options market, a stock owner of an underlying stock can write calls or buy puts. In the same options market, the short sellers of the underlying stock can buy calls or write puts.
Popular Insurance Terms
Calculations involving the mortality rate of a company's insureds and the rate of return on the company's investments. It is used in calculating the prospective reserve. ...
Combination of coverages from property and liability policies. ...
Accident policy that covers a traveler for a single trip on an airplane or other common carrier. The name comes from its origin as part of the ticket or ticket stub, but these policies are ...
Break in commercial activities due to the occurrence of a peril. Coverage against business interruption by various named perils can be obtained through insurance. ...
Limitation under a contributory pension plan of an employee's right to receive vested benefits. The employee can withdraw contributions to the pension plan only according to stated ...
In a pension plan that an employer is required to make against future contributions (other than a cash basis as required by the IRS). Such credits may arise when an employee leaves an ...
Coverage against flooding for personal and business property under the National Flood Act of 1968, which encourages participation by private insurers in the program through an industry ...
In life insurance, single payment instead of a series of installments. ...
Accrediting body for the ACAS (Associate of the Casualty Actuarial Society) designation and the FCAS (Fellow of the Casualty Actuarial Society) designation. To earn these designations, ...
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