Overview -  Multiple Uses for Protection Buyers and Protection Sellers

• IFEX ELF contracts provide cheap and convenient access to the catastrophe reinsurance market.
  
  
• US Tropical Wind catastrophe reinsurance is an attractive asset class largely uncorrelated with other financial market risk.
  
  
• Protection Buyers and Sellers will be able to lock in prices for future years ahead of normal renewal dates for conventional reinsurance. This will create a ‘renewals strip’ of anticipated future renewal premium rates.
  
  
• Because trading in ELF contracts is possible during the contract risk period,  those that have bought or sold protection can readjust their positions continuously – ‘dynamic reinsurance hedging’.
  
  
• Trading is possible when a tropical storm or hurricane is developing, i.e. as ‘live CAT' - or after a storm has made landfall, i.e. as ‘dead CAT’.
  
  
•  Investors in insurance linked securities with catastrophe exposures can overlay their positions with
   the 2010 and 2011 IFEX ELF contracts to fine tune their catastrophe exposures.
  
  
• The 2011 ELF contracts allow pre-positioning by Protection Buyers and Sellers versus the cost of 2010 reinsurance renewals.
  
  
• The 2010 and 2011 ELF contracts will provide exposure/cover for Protection Buyers of US wind events during the calendar years of 2010 and 2011 respectively.
  
  
• Conventional reinsurers can use IFEX ELF contracts to increase or decrease their US wind exposures in different geographical territories and specific loss trigger levels.
  
  
• Protection Buyers and Sellers can trade insurance price without insurance risk by buying and selling ELF contracts outside of the hurricane season.
  
  
• IFEX ELFs can be used to ‘close out’ traditional reinsurance positions.
  

For more information on specific Trading Strategies, please select each from the main 'Trading Strategies' menu.