Alternative Risk Transfer (ART)

Generic phrase used to denote various non-traditional forms of re/insurance and techniques where risk is transferred to the capital markets. On a broader note it refers to the convergence of re/insurance, banking and capital markets. For example, when a corporate wanting protection against natural calamities either sets up a captive insurance company or uses securitisation of risk to cover itself, it is using an alternative to traditional insurance, and hence the device is called alternative risk transfer.