scholarly journals Interest-Rate Changes and the Value of a Non-life Insurance Company

2003 ◽  
Vol 33 (2) ◽  
pp. 347-364 ◽  
Author(s):  
Thomas Albrecht ◽  
Keyword(s):  
Interest Rate ◽  
Life Insurance ◽  
Asset Allocation ◽  
Insurance Company ◽  
Portfolio Risk ◽  
Life Insurance Company ◽  
Risk Capital ◽  
Management Perspective ◽  
Premium Income ◽  
Risk Managers

How does a change in the risk-free interest-rate affect the value of a non-life insurance company or portfolio? Risk managers typically argue that there should be little impact as long as assets and liabilities are properly matched. However, the risk-management perspective focuses on existing assets and liabilities, while neglecting the value of future business potential. This paper argues that interest-rate changes can have a significant impact on the appraisal value of a non-life insurance company, even if assets and liabilities are matched. This impact can be positive as well as negative, depending on the underlying parameters. Relevant parameters include reserving intensity, combined ratio, business growth-rate, asset allocation, risk-capital relative to premium income and the correlation between interest-rate and technical insurance results.

scholarly journals Interest-Rate Changes and the Value of a Non-life Insurance Company

2003 ◽  
Vol 33 (02) ◽  
pp. 347-364
Author(s):  
Thomas Albrecht ◽  
Keyword(s):  
Interest Rate ◽  
Life Insurance ◽  
Asset Allocation ◽  
Insurance Company ◽  
Portfolio Risk ◽  
Life Insurance Company ◽  
Risk Capital ◽  
Management Perspective ◽  
Premium Income ◽  
Risk Managers

How does a change in the risk-free interest-rate affect the value of a non-life insurance company or portfolio? Risk managers typically argue that there should be little impact as long as assets and liabilities are properly matched. However, the risk-management perspective focuses on existing assets and liabilities, while neglecting the value of future business potential. This paper argues that interest-rate changes can have a significant impact on the appraisal value of a non-life insurance company, even if assets and liabilities are matched. This impact can be positive as well as negative, depending on the underlying parameters. Relevant parameters include reserving intensity, combined ratio, business growth-rate, asset allocation, risk-capital relative to premium income and the correlation between interest-rate and technical insurance results.

The efficacy of life insurance company general account equity asset allocations: a safety-first perspective using vine copulas

2018 ◽  
Vol 12 (2) ◽  
pp. 372-390
Author(s):  
Ryan Timmer ◽  
John Paul Broussard ◽  
G. Geoffrey Booth
Keyword(s):  
Life Insurance ◽  
Asset Allocation ◽  
Price Volatility ◽  
Extreme Value ◽  
Insurance Company ◽  
Life Insurance Company ◽  
General Account ◽  
Regulatory Bodies ◽  
Primary Focus ◽  
Asset Allocations

AbstractWe study the asset allocation decision of a life insurance company’s general account with respect to the possibility of large negative economic shocks and examine how this account is affected by policyholder investment decisions in the company’s separate account. This is accomplished using a performance metric that incorporates downside risk measured using univariate and multivariate extreme value distributions. Because of its well-known price volatility, diversification attributes, and significant weight in the combined general and separate accounts, our primary focus is the company’s equity investments. Although industry asset allocations have varied over the past two decades, we find that the actual allocations to equity in the general account are close to the allocation percentages suggested by our extreme value metrics and both are far below the maximum values indicated by the relevant regulatory bodies.

scholarly journals E-Proposal to Expedite Customer's Decision Making on Committing Insurance Transaction

2015 ◽  
Vol 21 (4) ◽  
pp. 612-617
Author(s):  
Idris Gautama So ◽  
Rosi Yosevie
Keyword(s):  
Decision Making ◽  
Life Insurance ◽  
Object Oriented ◽  
Success Factor ◽  
Insurance Company ◽  
Life Insurance Company ◽  
Web Based ◽  
Object Oriented Design ◽  
Premium Income ◽  
New System

Objectives of this paper are to analyze the current system of policies selling in a particular Life Insurance company, especially for unit link life insurance product to understand the problems or gaps in the company. According to the result of Business Inteligence (Analysis of Insurance Industry) from the particular Life Insurance, assets of the company are big enough to do some investments in technology to gain more premium income, but the fact is premium income of said Life Insurance company was not good enough if it is compared with its competitors. So based on that problem, it is needed to find the requirements of new system as a solution, then the design a new web-based application of e-proposal to customer's decision making of the Life Insurance company. Methodology which is used in this research are colecting data by library research and field research. After that, analysis based on the theory Fishbone Diagram Analysis, Critical Success Factor Analysis, and Object Oriented Analysis will be carried out. On the design phase, Object Oriented Design is used and then evaluate the result of a new system design by Eight Golden Rules of designing user interface. Result of this research is a web based application to make the distribution of proposal faster and more simple. The procedure of new system will also make the information of policies benefit can be easily accessed by Customer and Insurance Agencies, so the company will also gain customer satisfaction and loyalty. In the end, we can conclude that e-proposal is the right solution for the company to drive customer's decision making and finally will improve Life Insurace company's product selling and also increase the premium income.

How to derive optimal guarantee levels in participating life insurance contracts

2019 ◽  
Vol 20 (5) ◽  
pp. 445-469 ◽  
Author(s):  
Alexander Braun ◽  
Marius Fischer ◽  
Hato Schmeiser
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Life Insurance ◽  
Asset Allocation ◽  
Equity Capital ◽  
Insurance Companies ◽  
Insurance Company ◽  
Content Type ◽  
Contract Duration ◽  
The Interest Rate

Purpose The purpose of this paper is to show how an insurance company can maximize the policyholder’s utility by setting the level of the interest rate guarantee in line with his preferences. Design/methodology/approach The authors develop a general model of life insurance, taking stochastic interest rates, early default and regular premium payments into account. Furthermore, the authors assume that equity holders must receive risk-adequate returns on their initial equity contribution and that the insurance company has to maintain a solvency restriction. Findings The findings show that the optimal level for the interest rate guarantee is in general far below the maximum value typically set by the supervisory authorities and insurance companies. Originality/value The authors conclude that the approach of deviating from the maximum interest rate guarantee level given by the regulatory requirements can create additional value for the rational policyholder. In contrast to Schmeiser and Wagner (2014), the second finding shows that the interest rate guarantee embedded in a life insurance product becomes less attractive compared to a pure investment in the underlying asset portfolio to the policyholder when the guarantee level is lowered too far or the contract duration is short. They also refute Schmeiser and Wagner (2014) by showing that the equity capital required by the insurance company increases with the level of the guarantee, even if the insurer is flexible with respect to its asset allocation. The last finding is that a policyholder with higher risk aversion does not generally prefer a higher guarantee level.

Patient Statement: Chemical Sensitivity One Victim's Perspective

1994 ◽  
Vol 10 (4-5) ◽  
pp. 319-321
Author(s):  
Cynthia Wilson
Keyword(s):  
Interest Rate ◽  
Real Estate ◽  
Life Insurance ◽  
Commercial Real Estate ◽  
Insurance Company ◽  
Chemical Sensitivity ◽  
Life Insurance Company ◽  
New Construction ◽  
Real Estate Developers ◽  
The Interest Rate

Not a day goes by that I don't miss my old life and the old me. To illustrate how my life has changed, I have two brief stories. In 1982, I developed a lending procedure in conjunction with Banker's Life Insurance Company that enabled commercial real estate developers to secure permanent financing for property that had not yet been developed in essence using a permanent loan in place of a construction loan. It fixed the interest rate, at a time when new construction rates were bankrupting many projects and it allowed the developer to invest the excess funds to offset interest expenses. I received national recognition for this loan. In 1989, the police found me wandering around in 15 inches of snow, in below zero weather with no shoes or coat. The officer took me to the hospital because I was obviously disoriented. I didn't even know my name or where I lived. These stories show the disparity between my life as a successful, independent business woman and my life as someone who is chemically disabled.

Tuesday Evening

PMLA ◽  
1935 ◽  
Vol 50 (4) ◽  
pp. 1357-1357
Keyword(s):  
Life Insurance ◽  
Insurance Company ◽  
Life Insurance Company ◽  
Local Committee ◽  
Tuesday Evening

On Tuesday evening the members of the Association, and attending members of their families, were entertained with a buffet supper at the Queen City Club at 7:30 p.m. at the invitation of Messrs. Joseph S. Graydon, John J. Rowe, and other Cincinnati friends of the Association. Following this supper an entertainment arranged by the Local Committee was presented in the Hall of the Western and Southern Life Insurance Company. Attendance: about 900.

Hr Practices And Hr Policies At Icici Prudential Life Insurance Company Ltd

Think India ◽  
2019 ◽  
Vol 22 (3) ◽  
pp. 348-354
Author(s):  
T. Krishna Veni ◽  
G. Kalyani
Keyword(s):  
Human Resources ◽  
Life Insurance ◽  
Insurance Company ◽  
Life Insurance Company ◽  
Hr Practices ◽  
Commercial Center

The job of Human Resources is changing as quick as innovation and the worldwide commercial center. Generally, the HR Department was seen as organization, kept individual documents and different records, dealt with the enlisting procedure, and gave other authoritative help to the business. Those circumstances are different. The positive consequence of these progressions is that HR experts have the chance to assume a progressively vital job in the business. The test for HR chiefs is to stay up with the latest with the most recent HR developments—mechanical, lawful, and something else.

Indian Life Insurance Market and Corporate Performances: A Study of Selected Firms

2016 ◽  
Vol 4 (1) ◽  
Author(s):  
Joy Chakraborty ◽  
Partha Pratim Sengupta
Keyword(s):  
Market Share ◽  
Life Insurance ◽  
Market Concentration ◽  
Insurance Market ◽  
Insurance Companies ◽  
Insurance Company ◽  
Life Insurance Company ◽  
Insurance Sector ◽  
Life Insurers ◽  
Company Limited

In the pre-reform era, Life Insurance Corporation of India (LICI) dominated the Indian life insurance market with a market share close to 100 percent. But the situation drastically changed since the enactment of the IRDA Act in 1999. At the end of the FY 2012-13, the market share of LICI stood at around 73 percent with the number of players having risen to 24 in the countrys life insurance sector. One of the reasons for such a decline in the market share of LICI during the post-reform period could be attributed to the increasing competition prevailing in the countrys life insurance sector. At the same time, the liberalization of the life insurance sector for private participation has eventually raised issues about ensuring sound financial performance and solvency of the life insurance companies besides protection of the interest of policyholders. The present study is an attempt to evaluate and compare the financial performances, solvency, and the market concentration of the four leading life insurers in India namely the Life Insurance Corporation of India (LICI), ICICI Prudential Life Insurance Company Limited (ICICI PruLife), HDFC Standard Life Insurance Company Limited (HDFC Standard), and SBI Life Insurance Company Limited (SBI Life), over a span of five successive FYs 2008-09 to 2012-13. In this regard, the CARAMELS model has been used to evaluate the performances of the selected life insurers, based on the Financial Soundness Indicators (FSIs) as published by IMF. In addition to this, the Solvency and the Market Concentration Analyses were also presented for the selected life insurers for the given period. The present study revealed the preexisting dominance of LICI even after 15 years since the privatization of the countrys life insurance sector.

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