Structural risk modeling methods

{
  "id": "MLC-T-INS-003211",
  "term": "Structural risk modeling methods",
  "field": "Insurance and risk management",
  "definition": "Quantitative techniques used to assess and manage credit risk by modeling the financial structure of a firm and its ability to meet its debt obligations. These methods view default as occurring when the value of a firm's assets falls below a certain threshold, typically its liabilities. The Merton model is a well-known example that uses option pricing theory to estimate default probabilities.",
  "url": "https://mlchart.com/terminology/insurance/structural-risk-modeling-methods/"
}