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
Report developed by or supplied by a credit agency to an insurer dealing with the financial standing and character of an insurance applicant. These factors are carefully weighted by the ...
Procedure in which a home office interviewer (who may or may not have underwriting experience) interviews applicants on the telephone. The questions asked the applicant are automated and ...
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Frequency with which employees resign, are fired, or retire from a company, usually computed as the percentage, of an organization's employees at the beginning of a calendar year. The ...
Arrangement in which individuals serve as trustees of their own living trust and name another party (successor trustee) to manage the assets if they should become incapacitated. In this ...
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