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Essays and Commentaries
Flatlining
October 1, 1998. Also published in Insurance Finance & Investment, November 16, 1998.

What the heck is a zero beta asset?

Whaddaya mean new asset class?

Correlation coefficient?

You’ve got to be kidding me, adding earthquakes to my portfolio can actually reduce my risk!

Initial investor reaction to presentations about insurance-linked notes and their benefits in diversifying a portfolio often range from disbelief to scorn.  At best they are skeptical and we, like others, try to persuade them of our rationality with explanations about “efficient frontiers,” “diversification,” and “lower standard deviations”.  Pure as these theoretical arguments are, they are not always convincing.

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Echoes from the East
ECHOES FROM THE EAST
LESSONS FROM THE PAST
THOUGHTS FOR THE FUTURE

Lessons from the Past, Thoughts for the Future, September 1, 1998.

Some people think of 1992 as the year of Bill and Gennifer; others remember it as the year of Andrew and Inikki.

Current events have forced the former crowd to ruefully acknowledge that telltale events from the past have relevance for the present.

For the Andrew and Inikki crowd, however, current events have provided no such reminders.  Recent history in reinsurance terms has been benign.  Many of the lessons of 1992 have slipped off the radar screen.

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Warren Buffett on Risk - Or Risky Ground?
May 15, 1998.

Mr. Buffett deserves the world’s accolades when it comes to investing.  He is the nonpareil equity investor.  When he speaks, the world, and I, properly pay attention.

Permit me, however, to take issue with several of his recent comments on bonds in general, and catastrophe bonds in particular, which appeared in Schiff’s and are excerpted alongside.

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A New Wall and LaSalle Street Cocktail (With a Slice of Lime Street)
July 15, 1997. Also published in CFR Magazine, July-Aug. 1997 and The Risk Financier, November 1997

What a difference a year makes!  Last November CFO Magazine published a headline in its Newswatch column, “Disaster Bonds are a Catastrophe” (CFO November 1996).  The headline summed up a common sentiment at the time:  that the nascent effort to securitize insurance risk, once promised to be the next great wave of the future, was running out of gas.  It was indeed their winter of discontent.

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