Insurance policies covering multiple risk scenarios which have been pre-packaged and are less expensive than having multiple individual policies.
Let's say a Caribbean tour company offers a scuba diving, spelunking, and ATV package for a family of eager tourists on their island. Dad falls to the bottom of a cave, mom flies off the ATV and lands in a den of rabid, carnivorous platypuses, and little Timmy get carried off by a flotilla of sea turtles in an act of turtle protest against all the tourist boats disturbing their sea turtle peace and quiet.
Basket retention, in this case, will be used by the insurance company as an excess indemnity insurance contract to combine the several crazy risks found on this island in one insurance package.
Related or Semi-related Video
Finance: What is a Country Basket (Index...30 Views
Finance, a la shmoop. What is a country basket index fund?
All right we're picking daisies, marigolds, lilies so uh how do we [Pictures of flowers]
rephrase in Italian? Like, we want to fill a portfolio basket with just stocks [Pouring a glass of red wine]
representing the overall financial health of Italy. Is Italy healthy? While
they smoke a lot they drink a lot of wine they eat a bunch of pasta but there
always seems to be a woman from some small village who's celebrating her [Old woman at a birthday party]
117th birthday over there. Well a country basket is just an index fund of
stocks representing a country. Like we're doing Korea... South we're gonna have
in that basket dunno some Samsung, a load of Daewoo, a hunk of Hyundai and some [Company stocks being added to the basket]
nice barbecue on the side. That'd be our Korean country basket and it's a good
basket to fill if you're just bullish on a country but not really sure which
flower on which to place your bets. It's like instead of trying to decide between [The stocks in the basket turn into flowers]
roulette or poker or slots... Well you just buy stock in Las Vegas
Sands you know you bet on the entire casino, and bueno Fortuna you know good [Someone checking their cards in a casino]
luck there pal, doesn't the house always win? Yeah so why do people keep going there?...
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