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
One of the major underwriting organizations for insurance company pools insuring commercial aircraft liability exposure. ...
Process in life insurance by which an applicant who is uninsurable, or is a greater than average risk, seeks to obtain a policy from a company at a standard premium rate. Life insurance ...
Insurance against interruption of supply of goods and services. If firm A depends on firm B for its supply of goods and services, an interruption caused by damage or destruction to B can ...
Security sold by the issuer of the security directly to the purchasing financial institution without the inclusion of the investment banker in this process. Insurance companies are frequent ...
Very junior issues of debt, according to explicit statements in the indenture, which rank after other unsecured debt. ...
Rate of increase in asset value. ...
Frequency of illness, sickness, and diseases contracted. ...
Rating system under which a specific premium rate, rather than a manual or class rate, is assigned to each unit of exposure. ...
Same as term Burglary Insurance: coverage against loss as the result of a burglary. Found as part of the commercial package policy that has generally replaced the special multiperil ...
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