Transfer of insured risks from the insurance market to the capital market through a special purpose vehicle. The SPV sells bonds on the proviso that it can default on interest and/or capital repayments if the insured risk, e.g. a hurricane, occurs. The retained amounts fund the losses of the (re)insurer. Securitisation has provided alternative sources of capital when reinsurance capacity has been in short supply. See CATASTROPHE BONDS; INSURITISATION.