Debt Funding

Types of Debt Instruments:

• Bonds: Insurance companies can issue bonds, which are debt securities with fixed interest rates and maturity dates. These bonds can be publicly traded or privately placed with institutional investors.
• Subordinated Debt: Subordinated debt instruments rank below other debts in terms of priority during liquidation or bankruptcy. They typically offer higher yields to compensate for the increased risk.
• Catastrophe Bonds: Catastrophe bonds, also known as cat bonds, are specialized debt instruments that transfer insurance risks related to catastrophic events, such as natural disasters, to investors. In the event of a qualifying catastrophe, the principal or interest payments may be partially or entirely forgiven.
• Medium-Term Notes (MTNs): MTNs are debt securities with maturities typically ranging from 1 to 10 years. They can be issued in various currencies and offer flexibility in terms of timing and interest rates.