The mysterious ways of Structured Insurance. Cross-section Risk transfer and crises, from financial to pure Risk Securitization

Structured Insurance is mainly the result of the so called Alternative Risk Transfer, that is the process through which insurance companies, and non-financial firms afterwards, forward to the market the quota share of pure risk they wouldn’t or couldn’t keep (Life-insurance Securitization and CAT bonds issuing are good examples of this). Recent experience of western economies demonstrated that, whenever transparency levels lower, and supervision is stressed by financial innovation, it leaves enough space for information asymmetries that concentrate risks within groups of unaware investors. An effective control of information asymmetries seems to be the focus, together with a way back to the specialization of functions that convergence of Insurance and Financial markets destroyed during the last decades, thus leading to the cross-sector risk transfer.