Insurers embrace innovative hybrid capital structures

Contingent capital bonds are becoming increasingly attractive, writes Louie Woodall. But regulatory reforms mean firms must ensure they have a firm grip on the inner workings of these products

appleorange

Hybrid capital is occupying an ever-larger segment within insurers’ and reinsurers’ capital structures. Swiss Re reported a hybrid and contingent capital ratio of 9.4% in 2012, up from 6.6% in 2011, while Aviva’s stock of subordinated debt made up 20% of its capital structure on a market consistent embedded value basis in 2012, compared with 17.5% in 2010 (22% in 2011). Similarly, Zurich’s subordinated debt has increased over the past two years from 16.5% to 17%.

This year has witnessed a marked

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

The economic view

Insurers are using the delays to Solvency II to improve their economic capital models

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here