Insurance-and / or-reinsurance-product-pricing system and associated method

Abstract

A system and method of pricing an insurance and / or reinsurance product in the form of a credit default swap comprises a credit default swap information device holding a plurality of records of credit default swaps, and an insurance / reinsurance price generation device. The credit default swap records include an entity name, a period of the credit default swap, and a cost value for the credit default swap or a derivative thereof. The insurance / reinsurance price generation device retrieves the record, and processes this data to generate a price for the insurance and / or reinsurance of the product. The credit default swap is bought by or on behalf of the entity, and the entity is a company, state or quasi-sovereign party. Following a credit event which results in a loss, an insurance provider who issued the insurance product may pay out to the buyer of the credit default swap.

Description

The present invention relates to an insurance-and / or-reinsurance-product-pricing system. The invention further relates to a method of generating a price of an insurance-and / or-reinsurance product. Certain insurance and reinsurance products can be particularly difficult to price accurately. It can also be difficult to obtain effective reinsurance for these products. This applies to some types of commercial insurance and reinsurance products, as well as to insurance and reinsurance products in respect of states or quasi-states. The difficulty arises since it can be difficult to accurately determine the risk associated with insuring such an entity, or providing reinsurance for insurance in respect of such an entity. The present invention seeks to provide a solution to these problems. According to a first aspect of the present invention, there is provided an insurance-and / or-reinsurance-product-pricing system for pricing an insurance-and / or-reinsurance product associated with an entity which is a company, state or quasi-sovereign entity, the system comprising: a credit-default-swap-information device including a memory device having a credit-default-swap database stored thereon, the credit-default-swap database including a plurality of records of credit default swaps, each record including an entity-name value which identifies an entity name associated with the credit default swap, a credit-default-swap period value which identifies a period of the credit default swap, and a cost value which identifies a cost of the credit default swap or a derivative thereof; and an insurance-and / or-reinsurance-price-generation device in communication with the credit-default-swap-information device, the insurance-and / or-reinsurance-price-generation device configured to retrieve from the credit-default-swap database at least one record, and generate at least one insurance-and / or-reinsurance price of at least one insurance-and / or-reinsurance product based on the or each record, each insurance-and / or-reinsurance product being in respect of one entity as identified by the entity-name-credit-default-swap value of the record and being for an insurance-and / or-reinsurance period corresponding to the credit-default-swap period value of the record, the insurance-and / or-reinsurance price being based on the cost value of the record. A credit default swap is a financial derivative that "swaps", or trades, a risk of default on reference debt, such as senior bonds. A buyer of a credit default swap is being protected against the risk that a bond issuer may default, due to a credit event. If the bond issuer does default, the buyer of the credit default swap would be made whole. In exchange for that protection, the credit default swap buyer typically makes fixed payments to the credit default swap seller over a tenor, or duration, of the credit default swap. Additionally, the buyer may pay or receive additional payment, also known as points upfront, to level out the risk associated with the trade. For example, if the fixed payment that was set at a contract's inception is not high enough to compensate for the risk, the buyer might have to pay extra upfront to enter the contract. The cost of a credit default swap is representative of the assumed risk of the bond issuer undergoing a credit event. In other words, the higher the cost of the credit default swap, the higher the risk of the bond issuer undergoing a credit event. As such, the price of an insurance product for the bond issuer can be based upon this cost, assuming the insurance product relates to the same circumstances as the credit default swap. This is since the price of an insurance product is also dependent on the risk of the event occurring. Anyone can buy a credit default swap; the buyer does not need to hold a bond of the entity with reference to whom the credit default swap has been issued. Since credit default swaps can be publicly sold, there exists publicly accessible data regarding the cost of the credit default swap. The system according to the present invention utilises that cost data to generate the price of an insurance product in respect of that entity. This can be done in an efficient and automated or semi-automated fashion. As long as there is a credit default swap which is solely in reference to the entity and which is publicly available to purchase, the cost details of the credit default swap can be utilised to generate a price for an insurance and / or reinsurance product in respect of that entity. The entity is here a company, in particular a very large company, a state or a quasisovereign entity, since those are the entities for which there are single-name credit default swaps. For example, the state may be a sovereign state, such as the United Kingdom, or a federated state, such as the US State of Georgia. A quasi-sovereign entity may include a development bank, sovereign wealth fund, or government institution. Credit default swaps can be issued with reference to bonds issued by multiple entities. However, basing an insurance price for one entity on the cost of a credit default swap issued in reference to more than that entity would present unacceptable risks and would not be cost-efficient. Preferably, the insurance-and / or-reinsurance-price-generation device is configured to receive a price request from a requester device, the price request including insurance-and / or-reinsurance-period data and entity name data, the insurance-and / or-reinsurance-price-generation device configured to retrieve from the credit-default-swap database a record having the entity-name-credit-default-swap value corresponding to the entity name data and the credit-default-swap period value corresponding to the insurance-and / or-reinsurance period, generate the insurance-and / or-reinsurance price of the insurance-and / or-reinsurance product based on the cost value of the retrieved record, and transmit the insurance-and / or-reinsurance price to the requester device. As such, a party who desires to purchase insurance, such as the entity, an agent on behalf of the entity, for example, an insurance broker, or a third party which has a relationship with the entity, can request the insurance price and be automatically provided with it. Additionally, the system may further comprise a requester device, a coordinating device, and a credit-default-swap seller device, the coordinating device communicated with the requester device and the credit-default-swap seller device, and configured to receive an order request from the requester device to obtain the insurance-and / or-reinsurance product, and transmit a purchase request to purchase the credit default swap to the credit-default-swap seller device. In this way, the insurance and / or reinsurance provider can conveniently purchase the credit default swap which effectively provides reinsurance for the insurance and / or reinsurance product. Advantageously, the price request may further include an indemnity value of the insurance-and / or-reinsurance product, the insurance-and / or-reinsurance price being based on the indemnity value. Beneficially, the credit default swap may have a credit event definition which matches a definition of loss of the insurance-and / or-reinsurance product. Since the credit event definition matches the definition of loss, the insurance product pays out on the same conditions that the seller of the credit default swap pays out to the buyer of the credit default swap. Therefore, since the insurance provider is the buyer of the credit default swap, the insurance provider is effectively reinsured. Preferably, the credit default swap may have a notional amount which equates or substantially equates to an indemnity limit of the insurance-and / or-reinsurance product. In this way, the insurance provider can effectively be fully reinsured for the insurance-and / or-reinsurance product. Optionally, the credit-default-swap period value and / or the insurance-and / or-reinsurance period may be for up to 1 year. Alternatively, the credit-default-swap period value and / or the insurance-and / or-reinsurance period may be for at least 1 year. Particularly, the credit-default-swap period value and / or the insurance-and / or-reinsurance period may be for more than 1 year. The insurance provider can thus provide long term insurance policies, such as for terms of one year, three years, or five years. Such durations of policies may typically be difficult to provide. Preferably, the cost value may be given as a percentage of a notional amount of the credit default swap. The cost value may be given in units of basis points (units of 0.01 %). As such, the cost value can be used to calculate the price of insurance products having different indemnity limits. Advantageously, the insurance-and / or-reinsurance price is generated at least in part by multiplying the cost value by a currency value to provide the price per currency value of indemnity. For example, the cost value may be multiplied by one million USD, EUR, or GBP to provide an insurance-and / or-reinsurance price in units of per million USD, EUR, or GBP of cover. Other currencies and values may be considered. Beneficially, the insurance-and / or-reinsurance product may be a financial lines insurance product, such as at least any one of Directors and Officers Liability Insurance, Directors and Officers Liability Reinsurance, Excess Bank Deposit Insurance, Investment Portfolio Protection Insurance. For such insurance and / or reinsurance products, it is reasonable to have a definition of loss which is similar or identical to a credit event of a credit default swap. Alternatively, the insurance product could be a credit insurance product, although it will be appreciated that it may be desirable to exclude credit insurance products from the application of the invention. According to a second aspect of the invention, there is provided a method of generating a price of an insurance-and / or-reinsurance product associated with an entity, the method comprising: a) at a price-generation device, retrieving from a credit-default-swap-information device a cost value which identifies a cost of a credit default swap or a derivative thereof, the cost value being of a record of a credit-default-swap database stored on a memory device of the credit-default-swap-information device, the record further having an entity-name-credit-default-swap value which identifies a name of the entity and a credit-default-swap period value which identifies a period of the credit default swap; and b) the price-generation device generating a price of the insurance-and / or-reinsurance product based on the cost value, the insurance-and / or-reinsurance product being in respect of the entity as identified by the entity-name-credit-default-swap value of the record and being for an insurance-and / or-reinsurance period corresponding to the credit-default-swap period value of the record. Additionally, the method may further comprise a step of, at the price-generation device, receiving a price request from a requester device, the price request including an entity-name-insurance-and / or-reinsurance value which identifies an entity name associated with the insurance-and / or-reinsurance product and an insurance-and / or-reinsurance-policy-period value which identifies a period of the insurance-and / or-reinsurance product, the cost value retrieved being of a record which has an entity-name-credit-default-swap value which corresponds to that of the entity-name-insurance-and / or-reinsurance value and a credit-default-swap period value which corresponds to that of the insurance-and / or-reinsurance-policy-period value, and transmitting the price of the insurance-and / or-reinsurance product to the requester device. Preferably, the method may further comprise a step of, at a coordinating device, receiving an order request from a requester device to obtain the insurance-and / or-reinsurance product and transmitting a purchase request to purchase the credit default swap to a credit-default-swap seller device. The invention will now be more particularly described, by way of example only, with reference to the accompanying drawing, in which: Figure 1 shows an insurance-and / or-reinsurance-product-pricing system in accordance with a first aspect of the invention. Referring to Figure 1, there is shown an insurance-and / or-reinsurance-product-pricing system 10 for pricing an insurance-and / or-reinsurance product associated with an entity which is a company, state or quasi-sovereign entity. The insurance-and / or-reinsurance-product-pricing system 10 comprises an insurance-and / or-reinsurance-price-generation device 12, and a credit-default-swap-information device 14. The insurance-and / or-reinsurance-price-generation device 12 may be a computing device having at least a processor, and may be a server. The insurance-and / or-reinsurance-price-generation device 12 may be operated by an insurance and / or reinsurance provider, and may be located at a premises of the insurance and / or reinsurance provider, or elsewhere. The credit-default-swap-information device 14 includes at least a memory device having a credit-default-swap database stored thereon, and may be a server. The credit-default-swap-information device 14 may be operated by a financial exchange operator, such as Intercontinental Exchange, Inc. (ICE) (RTM). The credit-default-swap database may be a financial exchange platform including information on credit default swaps. Alternatively, the credit-default-swap database may be an intermediary database which includes information derived from a financial exchange platform. In this instance, the credit-default-swap-information device 14 may be operated by a bank, such as an investment bank, rather than a financial exchange operator. The information is provided in the form of a plurality of records, each record including at least an entity-name value, which identifies an entity name associated with the credit default swap, a credit-default-swap period value, which identifies a period of the credit default swap, and a cost value, which identifies a cost of the credit default swap or a derivative thereof. The period of the credit default swap may otherwise be referred to as a tenor of the credit default swap, and relates to a time until the expiration of the credit default swap. Each record has an entity-name value which identifies only a single name. As such, the credit default swap associated with the record is a single-name credit default swap. Therefore, the credit default swap is in relation to one or more bonds issued by a single entity. The cost of the credit default swap may include an upfront cost component, and a termly cost component, for example a quarterly cost. The cost of the credit default swap may be given as a percentage of a notional amount of the credit default swap, for example in the format of a number of basis points. Alternatively, the cost may be formatted as a currency value. The cost of the credit default swap may be provided as a derivative of the actual cost components, and be given as a single upfront cost which accommodates the termly cost component. This is particularly the case where the credit default swap is wrapped in a warrant. The cost value may be the market recovery spread of the credit default swap. Each record may also include a notional amount value, identifying a notional amount of the credit default swap. The record may further include credit-event data, identifying conditions for a credit event of the credit default swap which triggers settlement of the credit default swap. Each credit default swap may be wrapped in the form of a warrant. When the credit event of a typical credit default swap occurs, the seller does not typically pay out a full notional amount of the credit default swap. Instead, the buyer recovers from the seller a portion of the notional amount, as determined by a dealer auction or credit-fixing event. So that the buyer may recover a full and fixed amount equal to the notional amount, here, the warrant includes the credit default swap, along with a mechanism by which the seller pays to the buyer the difference between the amount recovered from the dealer auction, and the notional amount. This is equivalent to an over the counter fixed-recovery credit default swap, but may be quicker to issue. The insurance-and / or-reinsurance-price-generation device 12 is communicatively connected to the credit-default-swap-information device 14 by a first communication link 16. The insurance-and / or-reinsurance-price-generation device 12 and credit-default-swap-information device 14 may be remote from each other and so the first communication link 16 may be over the internet. The insurance-and / or-reinsurance-product-pricing system 10 may optionally further comprise a requester device 18 communicated with the insurance-and / or-reinsurance- price-generation device 12 via a second communication link 20. The requester device 18 may be a computing device which is operated directly by an entity which is to be insured, or an agent on behalf of the entity, such as an insurance broker, or a third party which has a relationship with the entity. The requester device 18 may be remote from the insurance-and / or-reinsurance-price-generation device 12 and so the second communication link 20 may be over the internet. The insurance-and / or-reinsurance-product-pricing system 10 may optionally further comprise a coordinating device for receiving a request from the requester device 18 and ordering a credit default swap. The coordinating device may be operated by the insurance and / or reinsurance provider and may be the same device as the insurance-and / or-reinsurance-price-generation device 12. Alternatively, the coordinating device may be a device linked with the insurance-and / or-reinsurance-price-generation device 12. In Figure 1, the coordinating device is shown as being the same device as the insurance-and / or-reinsurance-price-generation device 12. The coordinating device is communicated with the requester device 18. Since the coordinating device is shown as the same device as the insurance-and / or-reinsurance-price-generation device 12 in Figure 1, the communication is shown as being via the second link 20. The insurance-and / or-reinsurance-product-pricing system 10 may optionally further comprise a credit-default-swap seller device 22 communicated with the coordinating device. The credit-default-swap seller device 22 may be operated by an institution which sells credit default swaps or derivatives thereof. For example, the credit-default-swap seller device 22 may be operated by an investment bank. The credit-default-swap seller device 22 is communicated with the coordinating device, which is to say the insurance-and / or-reinsurance-price-generation device 12, by a third communication link 24, which may be over the internet. In some instances, the credit-default-swap seller device 22 and the credit-default-swap-information device 14 may be the same device or linked devices. In an example of use of the insurance-and / or-reinsurance-product-pricing system 10, the insurance-and / or-reinsurance-price-generation device 12 identifies at least one insurance or reinsurance product to be priced. The insurance or reinsurance product may include entity name data corresponding to the name of the entity in respect of which the insurance or reinsurance product is to be provided. The insurance or reinsurance product may further include insurance-and / or-reinsurance-period data corresponding to the period or contract length for which the insurance or reinsurance product is to be provided. Additionally, the insurance or reinsurance product may include an indemnity value of the insurance-and / or-reinsurance product. The insurance or reinsurance product may be, amongst other products, Main Board Side-A Directors and Officers Liability Insurance, Main Board Side-A Directors and Officers Liability Reinsurance, Excess Bank Deposit Insurance, Investment Portfolio Protection Insurance. The insurance-and / or-reinsurance-price-generation device 12 may then retrieve from the credit-default-swap-information device 14 a record having an entity-name-credit-default-swap value corresponding to the entity name data and a credit-default-swap period value corresponding to the insurance-and / or-reinsurance period. The record may additionally have a notional amount value which corresponds to the indemnity value of the insurance-and / or-reinsurance product. The insurance or reinsurance product may include a definition of loss which matches or corresponds to the credit event of the associated credit default swap. The credit event, and so the definition of loss, may include reference entity bankruptcy, failure to pay, obligation acceleration, repudiation, particularly for sovereign states, and moratorium. Similarly, the insurance or reinsurance product may include a maximum indemnity which matches or corresponds to the notional amount of the credit default swap. An insurance-and / or-reinsurance price of the insurance or reinsurance product may then be generated based on a cost value, or market recovery spread, of the record. The cost value is given in the relevant currency. The insurance-and / or-reinsurance price of the insurance or reinsurance product may correspond to an insurance premium. The market recovery spread may be the total percentage of the notional amount of the credit default swap which the buyer pays to the seller over the tenor of the credit default swap. This may be expressed in a number of basis points units of 0.01% of the notional amount. Since the credit default swap is being purchased as a warrant to permit fixed recovery, the market recovery spread is initially modified as per the following to result in the adjusted spread: New LGD Adjusted Spread = Baseline Spread x----------- J r r Baseline LGD The Baseline Spread is the market recovery spread. That is to say, it is the upfront cost of purchasing the underlying credit default swap of the warrant, as a percentage of the notional amount, usually given in a number of basis points. The “Baseline LGD” is the market recovery loss given default, expressed as a fraction. In other words, this is a fractional difference between the payout of the underlying credit default swap, and the notional amount of the underlying credit default swap. The payout of a credit default swap is the notional amount minus the recovery rate of the bond in the given scenario. So, the market recovery loss given default is the recovery rate subtracted from 1. For a typical credit default swap where the recovery rate is 0.4, the Baseline LGD would be 0.6. The “New LGD” is the Fixed Recovery Loss Given Default. The Fixed Recovery Loss Given Default is the recovery rate in the fixed recovery scenario subtracted from one. In the fixed recovery scenario, the payout would be the value of the notional amount. Therefore, the recovery rate is zero, and the New LGD is one. As such, for a typical credit default swap where the recovery rate can be considered to be 0.4, the Adjusted Spread is 1.67 times the Baseline Spread, expressed in a number of basis points of the notional amount To take account of quarterly payments of the credit default swap, a Risky Present Value, or risk-adjusted net present value, may then be calculated: " CFj x (1 - PDQ i=i (l+r)^ RPV01 is the Risky Present Value and is the Present Value of a basis point during the life of the trade, which is the default probability weighted discounted value of one basis point. “CFi" is the cash flow at time “i”. That is to say CFi is a coupon payment, or a given downstream payment due on a credit default swap, at a time i. “PDi” is the probability of default by time “i”. “r” is the risk-free rate or base yield. This may be, for example, a central bank base rate. “t” is the time in years to the ith payment. “n” is the total number of coupon payments due in the credit default swap. “i” is the indexation to denote each individual term in the series of coupon payments. The sum is taken for all coupon payments until the maturity date of the credit default swap. The cost of the warrant, expressed as a fraction of the notional amount or an equivalent number of basis points, may then be calculated by multiplying the Adjusted Spread by the RPV01. The absolute cost of the warrant may then be calculated by multiplying that fractional cost by the notional amount, which may be equivalent to a maximum indemnity of the insurance product. The cost of the insurance product can then be found by multiplying the absolute cost of the warrant, by various modifiers. The Modifiers may include multipliers based on distribution cost, credit default swap portfolio management cost, underwriting balance sheet cost, underwriting management cost, underwriting capacity access cost, and / or an adjustment for insurance market pricing. This calculation may be expressed as per the below: Insurance product cost = RPV01 x Adjusted Spread x Notional Amount x Modifier The insurance-and / or-reinsurance price, amongst other details, may then be presented or transmitted to the entity or another interested party who may be an insurance or reinsurance purchaser. However, instead of directly transmitting this price to the entity or the insurance or reinsurance purchaser, it may be transmitted via an agent, such as an insurance broker. If the insurance or reinsurance purchaser wishes to purchase the insurance or reinsurance, they may inform the insurance and / or reinsurance provider. The insurance and / or reinsurance provider may then purchase the credit default swap, or a warrant or other product containing the credit default swap, from the investment bank. This may be done via the coordinating device transmitting a purchase request to the credit-default-swap seller device 22, and the credit-default-swap seller device 22 transmitting a confirmation of purchase notification to the credit-default-swap seller device 22. The insurance and / or reinsurance provider then sells the insurance and / or reinsurance product to the insurance or reinsurance purchaser. The described purchasing process may require additional intermediate steps of communication between the insurance and / or reinsurance provider and the investment bank and / or insurance or reinsurance purchaser. Such intermediate steps of communication may be for the purpose of updating the cost value of the credit default swap and / or derivative thereof, and / or the price value of the insurance and / or reinsurance product. The intermediate steps of communication may include oral communication between personnel of the respective organisations. This process may be undertaken automatically, via a straight through process utilising an Application Programming Interface (API), with intercommunication between the credit-default-swap-information device 14, insurance-and / or-reinsurance-price-generation device 12, requester device 18, and credit-default-swap seller device 22. For example, the requester device 18 may transmit to the insurance-and / or-reinsurance-price-generation device 12 a price request including insurance-and / or-reinsurance-period data and entity name data. The insurance-and / or-reinsurance-price-generation device 12 may then retrieve from the credit-default-swap-information device 14 a credit default swap record having an entity-name-credit-default-swap value corresponding to the entity name data and a credit-default-swap period value corresponding to the insurance-and / or-reinsurance period. The insurance-and / or-reinsurance-price-generation device 12 may then generate the insurance-and / or-reinsurance price of the insurance-and / or-reinsurance product based on the cost value of the retrieved record. The insurance-and / or-reinsurance price is then transmitted to the requester device. If the operator of the requester device 18 wishes to purchase the associated insurance-and / or-reinsurance product, they may transmit an order request to the coordinating device from the requester device 18. The coordinating device may receive this and accordingly transmit a purchase request to the credit-default-swap seller device 22 to purchase the credit default swap. At the same time, the coordinating device may transmit confirmation to the requester device 18 that the insurance-and / or-reinsurance product has been purchased. The credit-default-swap seller device 22 may transmit confirmation to the coordinating device that the credit default swap has been purchased. If a relevant credit event occurs, which is equivalent to the definition of loss of the insurance product and the credit event of the credit default swap, the seller of the credit default swap pays out the notional amount to the insurance provider, and the insurance and / or reinsurance provider may pay out the insurance indemnity to the entity or other purchaser of the insurance or reinsurance product. The payout in each case may be similar or identical, such that the insurance and / or reinsurance provider has been reinsured. It is therefore possible to provide an insurance-and / or-reinsurance-product-pricing system which bases the price of an insurance and / or reinsurance product on the cost of a credit default swap. The words ‘comprises / comprising’ and the words ‘having / including’ when used herein with reference to the present invention are used to specify the presence of stated features, integers, steps or components, but do not preclude the presence or addition of one or more other features, integers, steps, components or groups thereof. It is appreciated that certain features of the invention, which are, for clarity, described in the context of separate embodiments, may also be provided in combination in a single embodiment. Conversely, various features of the invention which are, for brevity, described in the context of a single embodiment, may also be provided separately or in any suitable sub-combination. The embodiments described above are provided by way of examples only, and various other modifications will be apparent to persons skilled in the field without departing from the scope of the invention as defined herein.

Claims

1. An insurance-and / or-reinsurance-product-pricing system for pricing an insurance-and / or-reinsurance product associated with an entity which is a company, state or quasi-sovereign entity, the system comprising:a credit-default-swap-information device including a memory device having a credit-default-swap database stored thereon, the credit-default-swap database including a plurality of records of credit default swaps, each record including an entity-name value which identifies an entity name associated with the credit default swap, a credit-default-swap period value which identifies a period of the credit default swap, and a cost value which identifies a cost of the credit default swap or a derivative thereof; andan insurance-and / or-reinsurance-price-generation device in communication with the credit-default-swap-information device, the insurance-and / or-reinsurance-price-generation device configured toretrieve from the credit-default-swap database at least one record, andgenerate at least one insurance-and / or-reinsurance price of at least one insurance-and / or-reinsurance product based on the or each record, each insurance-and / or-reinsurance product being in respect of one entity as identified by the entity-name-credit-default-swap value of the record and being for an insurance-and / or-reinsurance period corresponding to the credit-default-swap period value of the record, the insurance-and / or-reinsurance price being based on the cost value of the record.

2. The insurance-and / or-reinsurance-product-pricing system as claimed in claim 1, wherein the insurance-and / or-reinsurance-price-generation device is configured to receive a price request from a requester device, the price request including insurance-and / or-reinsurance-period data and entity name data, the insurance-and / or-reinsurance-price-generation device configured toretrieve from the credit-default-swap database a record having the entity-name-credit-default-swap value corresponding to the entity name data and the credit-default-swap period value corresponding to the insurance-and / or-reinsurance period,generate the insurance-and / or-reinsurance price of the insurance-and / or-reinsurance product based on the cost value of the retrieved record, andtransmit the insurance-and / or-reinsurance price to the requester device.

3. The insurance-and / or-reinsurance-product-pricing system as claimed in claim 1 or claim 2, further comprising a requester device, a coordinating device, and a credit-default-swap seller device, the coordinating device communicated with the requester device and the credit-default-swap seller device, and configured toreceive an order request from the requester device to obtain the insurance-and / or-reinsurance product, andtransmit a purchase request to purchase the credit default swap to the credit-default-swap seller device.

4. The insurance-and / or-reinsurance-product-pricing system as claimed in claim 2 or claim 3, wherein the order request and / or the price request further includes an indemnity value of the insurance-and / or-reinsurance product, the insurance-and / or-reinsurance price being based on the indemnity value.

5. The insurance-and / or-reinsurance-product-pricing system as claimed in any one of the preceding claims, wherein the credit default swap has a credit event definition which matches a definition of loss of the insurance-and / or-reinsurance product.

6. The insurance-and / or-reinsurance-product-pricing system as claimed in any one of the preceding claims, wherein the credit default swap has a notional amount which equates or substantially equates to an indemnity limit of the insurance-and / or-reinsurance product.

7. The insurance-and / or-reinsurance-product-pricing system as claimed in any one of the preceding claims, wherein the credit-default-swap period value and / or the insurance-and / or-reinsurance period is for up to 1 year.

8. The insurance-and / or-reinsurance-product-pricing system as claimed in any one of claims 1 to 6, wherein the credit-default-swap period value and / or the insurance-and / or-reinsurance period is for at least 1 year.

9. The insurance-and / or-reinsurance-product-pricing system as claimed in claim 8, wherein the credit-default-swap period value and / or the insurance-and / or-reinsurance period is for more than 1 year.

10. The insurance-and / or-reinsurance-product-pricing system as claimed in any one of the preceding claims, wherein the cost value is given as a percentage of a notional amount of the credit default swap.

11. The insurance-and / or-reinsurance-product-pricing system as claimed in any one of the preceding claims, wherein the insurance-and / or-reinsurance price is generated at least in part by multiplying the cost value by a currency value to provide the price per currency value of indemnity.

12. The insurance-and / or-reinsurance-product-pricing system as claimed in any one of the preceding claims, wherein the insurance-and / or-reinsurance product is a financial lines insurance product.

13. A method of generating a price of an insurance-and / or-reinsurance product associated with an entity, the method comprising:a) at a price-generation device, retrieving from a credit-default-swap-information device a cost value which identifies a cost of a credit default swap or a derivative thereof, the cost value being of a record of a credit-default-swap database stored on a memory device of the credit-default-swap-information device, the record further having an entity-name-credit-default-swap value which identifies a name of the entity and a credit-default-swap period value which identifies a period of the credit default swap; andb) the price-generation device generating a price of the insurance-and / or-reinsurance product based on the cost value, the insurance-and / or-reinsurance product being in respect of the entity as identified by the entity-name-credit-default-swap value of the record and being for an insurance-and / or-reinsurance period corresponding to the credit-default-swap period value of the record.

14. A method as claimed in claim 13, further comprising a step of, at the pricegeneration device, receiving a price request from a requester device, the price request including an entity-name-insurance-and / or-reinsurance value which identifies an entity name associated with the insurance-and / or-reinsurance 5 product and an insurance-and / or-reinsurance-policy-period value which identifiesa period of the insurance-and / or-reinsurance product, the cost value retrieved being of a record which has an entity-name-credit-default-swap value which corresponds to that of the entity-name-insurance-and / or-reinsurance value and a credit-default-swap period value which corresponds to that of the insurance-10 and / or-reinsurance-policy-period value, and transmitting the price of theinsurance-and / or-reinsurance product to the requester device.

15. A method as claimed in claim 14, further comprising, at a coordinating device, receiving an order request from a requester device to obtain the insurance-15 and / or-reinsurance product and transmitting a purchase request to purchase thecredit default swap to a credit-default-swap seller device.

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