A concise briefing on why subordinated debt and reinsurance address fundamentally different sides of the K-ICS capital equation—and why the first question should be which risk is creating the capital need.
Key Takeaways
- Subordinated debt increases available capital; reinsurance can reduce required capital through substantive risk transfer.
- The relevant comparison begins with the underlying risk—not with the financing instrument itself.
- For CFOs and CROs, the first question is: “Which risk is creating the capital need?”