Balancing Innovation and Risk Through Enhanced Derivatives Governance

Geoff Cole and Jackie Colella, Sapient Global Markets Typically considered an instrument reserved for hedge funds and complex investment strategies, derivatives are becoming far more common today within investment portfolios. Desire for benchmark outperformance and product differentiation in a crowded marketplace has led to a marked increase in the use of derivatives within US mutual…

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AM Best maintains focus on credit fundamentals of hedge fund reinsurers

Since the withdrawal of PaCRe Lt.’s financial strength rating and issuer credit rating at the company’s request, there has been considerable speculation in the market as to AM Best’s view on these hedge fund-sponsored reinsurers. AM Best remains committed to rating these types of structures, which differ from a traditional reinsurance company primarily as a…

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