scholarly journals PERSONAL NON-LIFE INSURANCE DECISIONS AND THE WELFARE LOSS FROM FLAT DEDUCTIBLES

2019 ◽  
Vol 49 (01) ◽  
pp. 85-116
Author(s):  
Mogens Steffensen ◽  
Julie ThøGersen
Keyword(s):  
Life Insurance ◽  
Insurance Contract ◽  
Welfare Loss ◽  
Exponential Utility ◽  
Power Utility ◽  
Optimal Position ◽  
Consumption Insurance ◽  
Pricing Rules ◽  
The Individual ◽  
Insurance Decisions

AbstractWe view the retail non-life insurance decision from the perspective of the insured. We formalize different consumption–insurance problems depending on the flexibility of the insurance contract. For exponential utility and power utility we find the optimal flexible insurance decision or insurance contract. For exponential utility we also find the optimal position in standard contracts that are less flexible and therefore, for certain nonlinear pricing rules, lead to a welfare loss for the individual insuree compared to the optimal flexible insurance decision. For the exponential loss distribution, we quantify a significant welfare loss. This calls for product development in the retail insurance business.

scholarly journals PERSONAL NON-LIFE INSURANCE DECISIONS AND THE WELFARE LOSS FROM FLAT DEDUCTIBLES

2019 ◽  
Vol 49 (1) ◽  
pp. 85-116 ◽  
Author(s):  
Mogens Steffensen ◽  
Julie Thøgersen
Keyword(s):  
Life Insurance ◽  
Insurance Contract ◽  
Welfare Loss ◽  
Exponential Utility ◽  
Power Utility ◽  
Optimal Position ◽  
Consumption Insurance ◽  
Pricing Rules ◽  
The Individual ◽  
Insurance Decisions

AbstractWe view the retail non-life insurance decision from the perspective of the insured. We formalize different consumption–insurance problems depending on the flexibility of the insurance contract. For exponential utility and power utility we find the optimal flexible insurance decision or insurance contract. For exponential utility we also find the optimal position in standard contracts that are less flexible and therefore, for certain nonlinear pricing rules, lead to a welfare loss for the individual insuree compared to the optimal flexible insurance decision. For the exponential loss distribution, we quantify a significant welfare loss. This calls for product development in the retail insurance business.

scholarly journals The IFRS 17 contractual service margin: a life insurance perspective

2021 ◽  
Vol 26 ◽  
Author(s):  
W. Yousuf ◽  
J. Stansfield ◽  
K. Malde ◽  
N. Mirin ◽  
R. Walton ◽  
...  
Keyword(s):  
Life Insurance ◽  
Market Value ◽  
Financial Statements ◽  
Insurance Contract ◽  
Accounting Standard ◽  
Insurance Contracts ◽  
Ifrs 4 ◽  
Insurance Perspective ◽  
To Come

Abstract IFRS 17 Insurance Contracts is a new accounting standard currently expected to come into force on 1 January 2023. It supersedes IFRS 4 Insurance Contracts. IFRS 17 establishes key principles that entities must apply in all aspects of the accounting of insurance contracts. In doing so, the Standard aims to increase the usefulness, comparability, transparency and quality of financial statements. A fundamental concept introduced by IFRS 17 is the contractual service margin (CSM). This represents the unearned profit that an entity expects to earn as it provides services. However, as a principles-based standard, IFRS 17 results in entities having to apply significant judgement when determining the inputs, assumptions and techniques it uses to determine the CSM at each reporting period. In general, the Standard resolves broad categories of mismatches which arise under IFRS 4. Notable examples include mismatches between assets recorded at current market value and liabilities calculated using fixed discount rates as well as inconsistencies in the timing of profit recognition over the duration of an insurance contract. However, there are requirements of IFRS 17 that may create economic or accounting mismatches of its own. For example, new mismatches could arise between the measurement of underlying contracts and the corresponding reinsurance held. Additionally, mismatches can still arise between the measurement of liabilities and the assets that support the liabilities. This paper explores the technical, operational and commercial issues that arise across these and other areas focusing on the CSM. As a standard that is still very much in its infancy, and for which wider consensus on topics is yet to be achieved, this paper aims to provide readers with a deeper understanding of the issues and opportunities that accompany it.

scholarly journals PERHITUNGAN PREMI ASURANSI JOINT LIFE DENGAN MODEL VASICEK DAN CIR

2019 ◽  
Vol 8 (3) ◽  
pp. 246
Author(s):  
I MADE WAHYU WIGUNA ◽  
KETUT JAYANEGARA ◽  
I NYOMAN WIDANA
Keyword(s):  
Stochastic Process ◽  
Interest Rates ◽  
Life Insurance ◽  
Insurance Premium ◽  
Insurance Contract ◽  
Insurance Company ◽  
Vasicek Model ◽  
Cir Model ◽  
Premium Payment ◽  
Premium Price

Premium is a sum of money that must be paid by insurance participants to insurance company, based on  insurance contract. Premium payment are affected by interest rates. The interest rates change according to stochastic process. The purpose of this work is to calculate the price of joint life insurance premiums with Vasicek and CIR models. The price of a joint life insurance premium with Vasicek and CIR models, at the age of the insured 35 and 30 years has increased until the last year of the contract. The price of a joint life insurance premium with Vasicek model is more expensive than the premium price using CIR model.

scholarly journals COVID - 19 AS A “SIGNIFICANT CIRCUMSTANCE” FOR RISK ASSESSMENT IN LIFE INSURANCE (IN AND AFTER THE PANDEMIC)

2021 ◽  
Author(s):  
Željka Primorac
Keyword(s):  
Risk Assessment ◽  
Health Status ◽  
Life Insurance ◽  
Personal Data ◽  
Severe Form ◽  
Insurance Contract ◽  
Hospital Treatment ◽  
Legal Norms ◽  
Legal Standards ◽  
The Right

The data on the health status of a policyholder represent a significant circumstance for risk assessment and concluding a life insurance contract, and are also legally relevant circumstances for exercising the rights from that contract. The author starts from a theoretical analysis of the perception of data on the health status of policyholders as personal data, comparing the right to confidentiality of such data with the duty to report them (before concluding a life insurance contract) in terms of reporting all circumstances relevant to the insurance risk assessment. In order to properly fulfil the obligation of pre-contractual nature, the paper analyses the legal norms governing this issue and also provides a comparative overview of the Croatian and German insurance legislation with special emphasis on the scope of health data that the insurer is authorised to require, the clarity of legal standards and legal insurance norms contained in the insurance questionnaires and the life insurance offer. Presenting the importance of COVID-19 infection and possible chronic consequences for human health, the author indicates the extent to which COVID-19 infection (mild or severe form of disease, possible need for hospital treatment) will have an impact on the design of new insurance questionnaires and the relevance of genetic testing results in the context of concluding future life insurance contracts.

scholarly journals Suggestions to modify Vietnam’s legal provisions on the insurable interest in life insurance

2019 ◽  
Vol 2 (3) ◽  
pp. 38-49
Author(s):  
Bach Thi Nha Nam
Keyword(s):  
Life Insurance ◽  
Insurance Contract ◽  
Business Law ◽  
Insurable Interest ◽  
Legal Provisions ◽  
Contract Performance ◽  
Insurance Business ◽  
Core Principle

The insurable interest in life insurance is a core principle for the parties to enter into an insurance contract. In case the policyholder does not have insurable interest to the insured, the life insurance contract will become invalid or the life insurance contract will terminate when the policyholder no longer has insurable interest in accordance with Vietnam Insurance Business Law. The practice of life insurance contract performance has raised many issues related to the insurable interest that Vietnam Insurance Business Law has not mentioned or are still lacking. Therefore, the legal provisions on insurable interest are covered with many shortcomings, and inconsistent with the practice of insurance business. On the basis of analysis of caselaw and insurance statutes in US jurisdiction, the author proposes to modify the legal provisions on the insurable interest stipulated in the Vietnam Insurance Business Law..

Health Economics: Select Concepts of the Health Production Function, Risk, and Insurance

2018 ◽  
Author(s):  
Bruce L Hall
Keyword(s):  
Health Care ◽  
Health Economics ◽  
Health Care Policy ◽  
Insurance Contract ◽  
Health Care Economics ◽  
Health Production ◽  
Health Production Function ◽  
Concept Of Health ◽  
The Individual ◽  
Entire Theory

The production of health as an output of various inputs is a key concept of health care economics and a key influence on health care policy. Similarly, the notion of risk—that an outcome might not turn out as expected or hoped—underpins the entire theory of insurance. Insurance, and the benefits it can provide, cannot be understood without understanding risk, or without understanding how the features of an insurance contract transform risk for the individual, the payer, or society. The health economist, policy maker, leader, expert operator, financier, insurer, clinician of any stripe, patient or family or advocate, or other interested stakeholder must always consider the structural, clinical, and economic anatomy of health care in the context of the underlying physiology of these economic concepts. This review contains 2 figures, 1 table, and 14 references. Key Words: health economics, health policy, health production, marginal return (diminishing), utility, inputs, QALY, risk (aversion or tolerance), insurance (contract features)

Insurability and employability of young cardiac patients

PEDIATRICS ◽  
1977 ◽  
Vol 60 (1) ◽  
pp. 126-129
Author(s):  
James A. Manning
Keyword(s):  
Congenital Heart Disease ◽  
Heart Disease ◽  
Life Insurance ◽  
Congenital Heart ◽  
Insurance Companies ◽  
Clinical Cardiology ◽  
Industrial Medicine ◽  
Bona Fide ◽  
Medical Directors ◽  
The Individual

The conference ended with a sense of improved understanding by the cardiologists, medical directors of life insurance companies, and physicians in industrial medicine of the shared problems and of the opportunities to liberalize the restrictions on insurance and on employment of the adult with congenital heart disease and to remove them altogether for the individual with a bona fide innocent murmur. Like clinical cardiology, insurance medicine is an ever-changing field, and medical directors of insurance companies are willing to consider that they can insure many conditions they had previously declined.

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