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Politics : The Iraq War And Beyond

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To: Ed Huang who wrote (284)	7/30/2003 4:01:04 AM
From: GUSTAVE JAEGER	Read Replies (2) of 9018

Re: Pentagon Scraps Online Terror Futures Market catastrophe insurance futures contract A type of futures contract traded on the Chicago Board of Trade since December, 1992, used to hedge an insurer's exposures from the catastrophe perils of wind, hail, earthquake, riot or flood over a quarterly period. Some of the contracts (or options thereon) cover specific geographic areas, reflecting different probabilities of various types of natural disasters, and some are national. The settlement value of the contract is determined by an index, or composite, of applicable loss data reported by many insurers for the contract period. If losses are greater than expected, the value of the contract increases. The buying insurer partly compensates for its unanticipated claim losses with the profit on the futures contract. If catastrophe losses are less than expected, the buyer incurs an investment loss on the contract (but has been spared significant catastrophe losses). insurance.cch.com Also worth a look: derivativesstrategy.com Time for those Pentagon freaks to update their "financial markets" database, huh?

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