What is CATASTROPHE REINSURANCE SWAP

A synthetic financial SWAP that provides one of the contracting parties with a cash inflow in the event of loss from a defined catastrophic event. In exchange for the contingent CASH FLOW, the second party receives an upfront fee. Although the swap assumes the function of standard INSURANCE or REINSURANCE , the underlying documentation is often simpler and more flexible to negotiate. See also PURE CATASTROPHE SWAP .