Alternative Risk Financing Facilities


DEFINITION of 'Alternative Risk Financing Facilities'

A type of private insurer that offers various types of coverage to both individuals and institutions. These insurers were originally created by groups of people or organizations that had a common need for a type of coverage that was not available commercially. In most cases, these same parties supplied the initial start-up capital to fund these facilities.

BREAKING DOWN 'Alternative Risk Financing Facilities'

Alternative risk financing facilities can provide several different types of coverage, such as property-casualty insurance, worker's compensation, directors and officers liability insurance and medical malpractice coverage. A wide variety of types of insured employ these facilities for coverage, such as banks, medical professionals, manufacturers and public entities. The majority of the headquarters for these entities are located in Bermuda.

  1. Financing Statement

    A written document outlining the financing agreement between ...
  2. Risk

    The chance that an investment's actual return will be different ...
  3. Casualty Insurance

    A broad category of coverage against loss of property, damage ...
  4. Financing

    The act of providing funds for business activities, making purchases ...
  5. Pure Risk

    A category of risk in which loss is the only possible outcome; ...
  6. Crowding Out Effect

    An economic theory stipulating that rises in public sector spending ...
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