Fabrizio Santoboni, Massimiliano Tomatis, Andrea Vincioni

Corporate insurance and debt capacity: the point of view of banks and insurance companies in Italy

  • Abstract

Informations and abstract

Keywords: Debt capacity, corporate insurance, credit risk mitigation, risk management, creditworthiness. JEL classification: G22; G21.

Basel II Framework brings important changes, since life insurance and surety policy are «eligible» guarantees for Credit Risk Mitigation. Nevertheless, banks could offer a better pricing to borrowers not because they are less risky, but because the whole operation would need a lower capital requirement. Therefore, corporate risks reduc- tion - which would allow, in the absence of credit rationing, a more profitable debt capacity - is necessarily achieved through an appropriate «umbrella insurance», able to cope with both direct and indirect loss. This paper examine the strategic role of insurance products in enterprise sector to help insuring firms' debt capacity to expand.

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