"This book evidences links and trade–offs between some key drivers of corporate value creation: capital structure, strategic definition of core and noncore risks, risk management retention and transfer, with a valuation of externalization, to achieve an integrated allocation and management of firm′s capital. From math to legal, it takes us a definite step forward in modern finance." –Jacques Tierny, Deputy CFO, Michelin Group
"For someone like me who has observed the evolution of financial theory and practice over the past twenty years, Culp′s new book is a really extraordinary undertaking and accomplishment. On one level, it provides a comprehensive–and quite readable–account of the most important financing and risk management innovations in both insurance markets and capital markets. Even more remarkable is its success in fitting these innovative solutions and products into a single, unified theory of financial markets–one that integrates the once largely separate discipline of insurance and risk management with the current theory and practice of corporate finance." –Donald Chew, Editor of Journal of Applied Corporate Finance and a founding partner of Stern Stewart & Co.
"Chris Culp succeeds to cover this multifaceted and somehow fragmented ART market in a holistic way." –Thomas Bruendler, President, Allianz Risk Transfer (UK) Limited
"This is indeed a book about convergence. It is dealing with the latest developments in the insurance and capital markets which blur the boundaries between these two areas. Laying the scientific foundations of ART, it also brings together theory and practice of this innovative field in an unprecedented way. Moreover, Culp looks behind the driving forces of ART and relates them back to their common underlying aspiration, the quest for optimal capital structure." –Paul Woehrmann, PhD, Head of Center of Excellence ART and Member of Executive Management Continental Europe Corporate, Zurich Financial Services
"Culp divulges the true nature of convergence–as art and science, rooted in both traditional theories and forward–looking practices. He demonstrates undeniably that the marriage of the insurance and capital markets, once considered futuristic, is a pragmatic solution for corporations seeking to manage risk, generate capital, and create new value." –Tobey Russ, President & CEO, Chubb Financial Solutions
PREFACE: COMPREHENSIVE APPROACH TO CORPORATION FINANCE.
PART I: THE QUEST FOR OPTIMAL CAPITAL STRUCTURE.
CHAPTER 1: The Nature of Financial Capital.
Appendix 1–1: A Brief Introduction to Capital Theory.
Appendix 1–2: A Review of Basic Option Concepts.
CHAPTER 2: A Securities Perspective on Capital Structure.
CHAPTER 3: When Is Capital Structure Irrelevant?
CHAPTER 4: Benefits and Costs of Debt and the "Trade–off Theory" of Optimal Capital Structure.
CHAPTER 5: Asymmetric Information, Adverse Selection, and the "Pecking Order Theory" of Optimal Capital Structure.
CHAPTER 6: Distinguishing between Capital Structure Theories.
CHAPTER 7: Risk and Signaling Capital.
CHAPTER 8: Regulatory Capital.
PART II: CAPITAL STRUCTURE AND RISK MANAGEMENT.
CHAPTER 9: A Vocabulary of Risk.
CHAPTER 10: Risk Management as a Process.
CHAPTER 11: Risk Management and Capital Structure.
PART III: CLASSICAL RISK TRANSFORMATION PRODUCTS.
CHAPTER 12: Commercial Banking Products.
CHAPTER 13: Derivatives.
CHAPTER 14: Asset Disposition and Securitized Products.
CHAPTER 15: Insurance.
CHAPTER 16: Reinsurance.
PART IV: ALTERNATIVE RISK TRANSFER PRODUCTS.
CHAPTER 17: Alternative Risk Finance vs. Alternative Risk Transfer.
CHAPTER 18: Alternative Risk Finance: Self–Insurance, Captives, and Captivelike Structures.
CHAPTER 19: Alternative Risk Finance: Finite Risk Products and Solutions.
CHAPTER 20: Integrated Multiline and Multitrigger Alternative Risk Transfer Products.
CHAPTER 21: Committed Capital and Guarantees.
CHAPTER 22: Alternative Risk Securitizations and Securitized Products.
PART V: PRACTICAL CONSIDERATIONS FOR WOULD–BE ARTISTS.
CHAPTER 23: USAA Prime: Choice Cats for Diversifying Investors (Morton N. Lane).
CHAPTER 24: Emerging Role of Patent Law in Risk Finance (J. B. Heaton).
CHAPTER 25: Weather Derivatives or Insurance? Considerations for Energy Companies (Andrea S. Kramer).
CHAPTER 26: Convergence of Insurance and Investment Banking: Representations and Warranties Insurance and Other Insurance Products Designed to Facilitate Corporate Transactions (Theodore A. Boundas and Teri Lee Ferro).