Enterprise Risk Management in the Life Insurance Industry
| Author | : |
| Publisher | : |
| Total Pages | : 134 |
| Release | : 2001 |
| Genre | : Life insurance |
| ISBN | : |
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Changes in the Life Insurance Industry: Efficiency, Technology and Risk Management
| Author | : J. David Cummins |
| Publisher | : Springer Science & Business Media |
| Total Pages | : 379 |
| Release | : 2012-12-06 |
| Genre | : Business & Economics |
| ISBN | : 1461550459 |
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Major challenges for life insurance companies have been posed by an unprecedented wave of mergers and acquisitions in the insurance industry and the emergence of non-traditional competitors such as banks, mutual fund companies and investment advisory firms. This is the first book to analyze the determinants of firm performance in the life insurance industry by identifying the `best practices' employed by leading insurers to succeed in this dynamic business environment. The book draws upon data from insurer financial statements as well as upon an extensive survey of life insurer management practices and strategic choices in distribution systems, information technology, mergers and acquisitions, human resources and financial strategies. Generic strategies such as cost leadership, customer focus, and product differentiation are analyzed as well as strategic practices specific to the insurance industry. Best practices are identified by measuring the economic efficiency of insurers and by comparing firms across the industry. Both cost and revenue efficiency are measured relative to best practice efficient frontiers consisting of the industry's dominant life insurance firms. Economies of scale and the effects of mergers and acquisitions on efficiency are also analyzed. Financial strategies are examined with specific reference to pricing policy, valuation of assets and liabilities, and the current state of firm-level risk management systems. The benchmarks established are the result of extensive fieldwork that identifies key financial risks and methodologies to both measure and manage them at the firm level. The results discussed in the book indicate that firm performance is significantly correlated with management practices and strategic choices. Thus, life insurers can improve profitability by adopting optimal combinations of strategies. The book contains important new material on the effects of strategic choices in product distribution systems, information technology, mergers and acquisitions, human resources, and financial risk management policies. In the area of efficiency, the methodology provides a new approach for identifying peer groups of insurers and measuring the performance of individual insurers relative to their peer group. On the topics of risk and pricing, new insights are offered relative to current methodologies and in regard to areas where improvement is clearly warranted. The book concludes with an analysis of the future opportunities and challenges in the life insurance industry facing managers, and the strategic options available to them to cope with these changes.
The European Insurance Industry
| Author | : Antonella Cappiello |
| Publisher | : Springer Nature |
| Total Pages | : 130 |
| Release | : 2020-03-04 |
| Genre | : Business & Economics |
| ISBN | : 3030431428 |
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This book analyses the methodologies and functions of a systemic approach to risk governance and internal control capable of tackling the complexity of the insurance business. It focuses on the main trends currently impacting the insurance industry, characterized by new operators, new products and services, new tools, new styles of competition, and new risks. It provides tips and empirical contributions addressing the role of sound internal control and risk management models within an ongoing revision of prudential regulation to better deal with the evolving scenario where insurance activities are becoming increasingly risky and complex. The book is of particular interest to scholars and students of insurance and financial services and practitioners in the insurance industry.
Enterprise Risk Management, Adverse Selection, and the Insurance Industry
| Author | : Tao Zhang |
| Publisher | : |
| Total Pages | : 266 |
| Release | : 2005 |
| Genre | : |
| ISBN | : |
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Risk Management for Enterprises and Individuals
| Author | : Baranoff |
| Publisher | : |
| Total Pages | : |
| Release | : 2009 |
| Genre | : Electronic book |
| ISBN | : 9781936126187 |
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ERM and QRM in Life Insurance
| Author | : Ermanno Pitacco |
| Publisher | : Springer Nature |
| Total Pages | : 236 |
| Release | : 2020-08-25 |
| Genre | : Business & Economics |
| ISBN | : 3030498522 |
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This book deals with Enterprise Risk Management (ERM) and, in particular, Quantitative Risk Management (QRM) in life insurance business. Constituting a “bridge” between traditional actuarial mathematics and insurance risk management processes, its purpose is to provide advanced undergraduate and graduate students in the Actuarial Sciences, Finance and Economics with the basics of ERM (in general) and QRM applied to life insurance business. The main topics dealt with are: general issues on ERM, risk management tools for life insurance and life annuities, deterministic and stochastic analysis of the behaviour of a portfolio fund, application of sensitivity testing to assess ranges of results of interest, stress testing to assess the impact of extreme scenarios, and the product development process for life annuity products.
Enterprise Risk Management
| Author | : Andreas Grünbichler |
| Publisher | : |
| Total Pages | : 11 |
| Release | : 2008 |
| Genre | : |
| ISBN | : |
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The term Enterprise Risk Management (ERM) represents a holistic approach to managing the risks that a company faces in a changing environment. Risk can be considered as a function of change, and risk management may thus be described as a technique for coping with the effects of change. Although risk management practices and methodologies have been around for decades, the area of ERM has recently gained attention from executive management, investors, rating agencies, regulators and academics.While risk management functions initially only monitored adherence to risk and other policies, they later on implemented the first risk measurement and quantification approaches. The next natural step was that risk management not only provided the risk status, but also took responsibility for hedging and risk mitigation activities, followed by satisfying the need for more risk-and-return analysis and recommendations. Nowadays, risk management functions further ex-pand their activities into the area of strategic analysis and business decision support. To put it in other words, risk management has moved from a passive analysis and quantification function to a proactive business enabler and strategy consultant role.Organizations of all types and sizes face a range of risks affecting the achievement of their objectives and influencing all decision-making. ERM supports intelligent and effective decision-making in order to optimize the level of calculated risk taken and to recognize opportunities where taking risks might benefit the organization.Zurich Financial Services defines Enterprise Risk Management as the structured Group-wide view to identifying, measuring, managing, reporting and responding to risks that affect the achievement of Zurich's strategic and financial objectives, including both upside and downside risks on both sides of the balance sheet.
Life Insurance Risk Management Essentials
| Author | : Michael Koller |
| Publisher | : Springer Science & Business Media |
| Total Pages | : 345 |
| Release | : 2011-05-04 |
| Genre | : Business & Economics |
| ISBN | : 3642207219 |
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The aim of the book is to provide an overview of risk management in life insurance companies. The focus is twofold: (1) to provide a broad view of the different topics needed for risk management and (2) to provide the necessary tools and techniques to concretely apply them in practice. Much emphasis has been put into the presentation of the book so that it presents the theory in a simple but sound manner. The first chapters deal with valuation concepts which are defined and analysed, the emphasis is on understanding the risks in corresponding assets and liabilities such as bonds, shares and also insurance liabilities. In the following chapters risk appetite and key insurance processes and their risks are presented and analysed. This more general treatment is followed by chapters describing asset risks, insurance risks and operational risks - the application of models and reporting of the corresponding risks is central. Next, the risks of insurance companies and of special insurance products are looked at. The aim is to show the intrinsic risks in some particular products and the way they can be analysed. The book finishes with emerging risks and risk management from a regulatory point of view, the standard model of Solvency II and the Swiss Solvency Test are analysed and explained. The book has several mathematical appendices which deal with the basic mathematical tools, e.g. probability theory, stochastic processes, Markov chains and a stochastic life insurance model based on Markov chains. Moreover, the appendices look at the mathematical formulation of abstract valuation concepts such as replicating portfolios, state space deflators, arbitrage free pricing and the valuation of unit linked products with guarantees. The various concepts in the book are supported by tables and figures.
Risk Management
| Author | : Hongmu Lee |
| Publisher | : Springer Nature |
| Total Pages | : 261 |
| Release | : 2021-11-25 |
| Genre | : Business & Economics |
| ISBN | : 9811634688 |
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This book outlines risk management theory systematically and comprehensively while distinguishing it from academic fields such as insurance theory. In addition, the book builds a risk financing theory that is independent of insurance theory. Until now, risk management (RM) theory has been discussed while the framework of the theory has remained unclear. However, this book, unlike previous books of this type, provides risk management theory after presenting a framework for it. Enterprise risk management (ERM) is seen differently depending on one’s position. For accountants, it is a means for internal control to prevent accounting fraud, whereas for financial institutions, it quantifies the risk that administrators can take to meet supervisory standards. Therefore, most of the ERM outlines are written to suit the intended uses or topics, with no systematic RM overviews. This book discusses a systematic RM theory linked to the framework of it, unlike previous books that were written according to topic. After the Enron scandal in December 2001 and WorldCom accounting fraud in June 2002, several laws were enacted or revised throughout the world, such as the SOX Act(Sarbanes-Oxley Act) in the United States and the Financial Instruments and Exchange Law and Companies Act in Japan. In this process, the COSO(Committee of Sponsoring Organizations of Treadway Commission) published their ERM framework, while the ISO (International Organization for Standardization) published their RM framework. The author believes that the competition between these frameworks was an opportunity to systematize RM theory and greatly develop it as an independent discipline from insurance. On the other hand, the Great East Japan Earthquake that occurred on March 11, 2011, caused enormous losses. Also, because pandemics and cyber risks are increasing, businesses must have a comprehensive and systematic ERM for these risks associated with their business activities
New Aspects of Product Risk Measurement and Management in the U.S. Life and Health Insurance Industries
| Author | : Bo Shi (Ph. D.) |
| Publisher | : |
| Total Pages | : 296 |
| Release | : 2012 |
| Genre | : |
| ISBN | : |
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Product risk is important to firms' enterprise risk management. This dissertation focuses on product risk in the U.S. life insurance and health insurance industries. In particular, we add new dimensions to the measurement of product risk for these industries, and we explore how these industries manage product risk in a context of other enterprise risks. In this dissertation, we identify new product risks, propose new measures, and study the management of these risks. In the life insurance industry, we identify a new type of product risk, the guarantee risk, caused by variable annuities with guaranteed living benefits (VAGLB). We propose a value-at-risk type measure inspired by the risk-based capital C3 Phase II to quantify the guarantee risk. In the health insurance industry, where the degree of uncertainty varies for different types of health insurance policies, we develop four exposure-based risk measures to capture health insurers' product risks. Then we study how life and health insurers manage product risks (and asset risks) by using capital in the context of other risks and appropriate controls. We add to the literature in the life insurance industry by examining the relationship between capital and risks when the guarantee risk is accounted for. In the health insurance industry, to our knowledge, no similar research on the relationship between capital and risks has been conducted. In view of the current topicality of health insurance, our research therefore adds a timely contribution to the understanding of health insurer risk management in an era of health care reform. Capital structure theories, transaction cost economics, and insurers' risk-taking behaviors provide the theoretical foundation for our research. As to methodology, we implement standard capital structure models for the life and health insurance industries using data from the National Association of Insurance Commissioners (NAIC) annual filings of life/health insurers and health insurers. Simultaneous equations modeling is used to model life and health insurers' enterprise risk management. And the estimation is conducted by the generalized estimation equations (GEE). We find that both U.S. life/health insurers and health insurers prudently build up capital as they experience more product risk and asset risk controlling for the other enterprise risks. We also find that life/health insurers may be using derivatives as a partial substitute for capital when managing new product risk caused by VAGLB, the guarantee risk.
