scholarly journals Climate risk reporting practices by UK insurance firms and pension schemes - Abstract of the London Discussion

2020 ◽  
Vol 25 ◽  
Keyword(s):  
Insurance Companies ◽  
Climate Risk ◽  
Publication Type ◽  
Reporting Practices ◽  
Pension Schemes ◽  
Insurance Firms ◽  
Risk Reporting

Abstract This abstract relates to the following paper: Klumpes, P., Acharyya, M., Kakar, G. & Sturgess, E. (2019) Climate risk reporting practices by UK insurance companies and pension schemes. British Actuarial Journal, 24, e30. doi:10.1017/S1357321719000229.

scholarly journals Climate risk reporting practices by UK insurance companies and pension schemes

2019 ◽  
Vol 24 ◽  
Author(s):  
P. Klumpes ◽  
M. Acharyya ◽  
G. Kakar ◽  
E. Sturgess
Keyword(s):  
Climate Change ◽  
Risk Management ◽  
Annual Reports ◽  
Insurance Companies ◽  
Climate Risk ◽  
Pension Scheme ◽  
Financial Risks ◽  
Reporting Practices ◽  
Pension Schemes ◽  
Risk Reporting

Abstract Increasing global concern over the impact of climate change has recently led to public scrutiny over the adequacy of existing risk management practices by insurance companies and pension schemes in dealing with these challenges that potentially impact both individual actuaries and the Institute and Faculty of Actuaries generally. Most recently, the Prudential Regulation Authority has issued further guidance concerning its expectations for the UK insurance industry regarding the development of an approach to disclosure on and management of the financial risks from climate change, while a Parliamentary Committee has demanded public clarification from UK pension scheme trustees regarding their degree of engagement with incorporating climate-related financial risks into their investment decision-making. The aim of this paper is to identify the dominating factors of the current evolvement of UK insurance companies’ and pension schemes’ climate risk disclosure practices. This paper analyses both the nature and extent of changes in the risk reporting practices of these entities that have evolved in order to meet these demands for increased accountability. We first analyse relevant sections of latest annual reports produced by a sample of 15 UK insurance companies and 15 pension schemes. We find only limited alignment of insurance firm and pension scheme annual reports with the 11 specific Task Force on Climate-Related Financial Disclosure’s (TCFD) recommended disclosures. We also examine what key financial risk and/or other organisational characteristics are most closely associated with the degree of alignment with TCFD specified disclosures related to governance, strategy, risk management and performance metrics. We find that incentives facing sample insurance companies to align their climate-related disclosures with TCFD recommendations are related to their management of reputation risk (measured on the basis of size and type of business). Whereas the incentives facing pension schemes are related to the desire to reduce information asymmetry (measured by liability risk) among their stakeholders concerning this issue. Further, consistent with a stakeholder theory explanation, it appears that only a minority of large, publicly listed insurance companies and large local government pension schemes are taking action to report on their actions to mitigate climate risk. We also discuss examples of best practice climate risk reporting. The implications for the actuarial profession in engaging with climate risk are discussed in line with the findings of the study.

Incentives Facing Life Insurance Firms to Report Actuarial Earnings: Evidence from Australia and the UK

2002 ◽  
Vol 17 (3) ◽  
pp. 237-256 ◽  
Author(s):  
Paul J. M. Klumpes
Keyword(s):  
Financial Reporting ◽  
Life Insurance ◽  
Insurance Companies ◽  
Reporting Practices ◽  
Financial Reporting Standards ◽  
Life Insurers ◽  
Insurance Firms ◽  
Definition Of ◽  
The Uk ◽  
Industry Professionals

During the 1990s, Australian and UK life industry professionals encouraged life insurance companies to provide investors with supplementary financial statements that incorporate the present value of actuarially calculated (“embedded value”) earnings (“PVAE”). However, these reporting practices have subsequently been criticized for potentially misleading investors and for failing to meet the definition of a recognizable asset. The propensity of proprietary UK and Australian life insurers to voluntarily report their PVAE is predicted to be driven by their desire to provide information to investors about their future profit expectations. The empirical tests are based on a sample of 67 Australian and UK proprietary and mutual firms. Consistent with the hypothesis, proprietary firms voluntarily reporting PVAE tend to have relatively higher future profit expectations than nondisclosing firms. These findings have implications for ongoing efforts to develop internationally harmonized financial reporting standards for life insurance companies.

scholarly journals Systemic Risk and Insurance Regulation †

Risks ◽  
2018 ◽  
Vol 6 (3) ◽  
pp. 74 ◽  
Author(s):  
Fabiana Gómez ◽  
Jorge Ponce
Keyword(s):  
Systemic Risk ◽  
Formal Model ◽  
Public Support ◽  
Solvency Ii ◽  
Capital Requirements ◽  
Insurance Companies ◽  
Prudential Regulation ◽  
High Exposure ◽  
Insurance Firms ◽  
Low Exposure

This paper provides a rationale for the macro-prudential regulation of insurance companies, where capital requirements increase in their contribution to systemic risk. In the absence of systemic risk, the formal model in this paper predicts that optimal regulation may be implemented by capital regulation (similar to that observed in practice, e.g., Solvency II ) and by actuarially fair technical reserve. However, these instruments are not sufficient when insurance companies are exposed to systemic risk: prudential regulation should also add a systemic component to capital requirements that is non-decreasing in the firm’s exposure to systemic risk. Implementing the optimal policy implies separating insurance firms into two categories according to their exposure to systemic risk: those with relatively low exposure should be eligible for bailouts, while those with high exposure should not benefit from public support if a systemic event occurs.

Poor Claims Settlement And Demand For Insurance Policies In Nigeria

2021 ◽  
Vol 8 (4) ◽  
pp. 53-64
Author(s):  
Omowumi Ayoni Momoh ◽  
Oyefemi Ismail O. Oyetunji
Keyword(s):  
Insurance Industry ◽  
Insurance Companies ◽  
Primary Data ◽  
Demand For Insurance ◽  
Insurance Policies ◽  
Chi Squared ◽  
Insurance Firms ◽  
And Control ◽  
Structured Questionnaire

This study investigates the poor claims settlement and demand for insurance policies in Nigeria to provide empirical evidence which would assist not only the insurance companies but also the policymakers by using these findings to design future insurance services and policies that can be geared towards promoting insurance market development. The population focused in the study included few licensed insurance firms in Nigeria. This is due to the fact that they dominate and control the larger interest in the market share. Primary data was used for this study through well-structured questionnaire. Chi- squared statistics and correlation with the tabulated contingency table on the basis of an assumptions were employed. The results show that poor claim settlement has significant effect on demand for Insurance policies in Nigeria and that there is long term and significant relationship between poor claim settlement and demand for insurance policies in Nigeria. The study therefore, recommends that insurance industry should be redefined through appropriate Acts, introducing competitions and innovations in the services so as to compete effectively and meet consumer needs by dealing with changing expectations of policyholders so as to ensure that satisfaction of all the parties are guaranteed.

scholarly journals Monetary Policy and Return on Equity of Quoted Insurance Firms: A Time Series Study from Nigeria

2018 ◽  
Vol 2 (1) ◽  
pp. 62-76
Author(s):  
Macfubara, Minafuro Suzane ◽  
Norteh Dumbor ◽  
Gberesuu, Barida Barry
Keyword(s):  
Monetary Policy ◽  
Unit Root ◽  
Unit Root Test ◽  
Policy Instruments ◽  
Granger Causality Test ◽  
Insurance Companies ◽  
Causality Test ◽  
Return On Equity ◽  
Independent Variables ◽  
Insurance Firms

The financial system is the transmission channel of monetary policy. This study examines the effect of monetary policy on the performance of insurance firms in Nigeria from 1990 – 2017. The objective is to investigate the existing relationship between monetary policy instruments and the performance indicators of insurance companies. Secondary data were sourced from Stock Exchange factbook, Central Bank of Nigeria (CBN) Statistical Bulletin. Multiple linear regressions were formulated to examine the effect of the independent variables on the dependent variable. Return on equity was modeled as a function of treasury bill rate, monetary policy rate, interest rate, growth of money supply and exchange rate.  R2, T-Statistics, β Coefficient, F-Statistics and Durbin Watson were used to examine the extent to which the independent variables affect the dependent variables while augmented dickey fuller unit root test, granger causality test, cointgration test and error correction models was used to ascertain the dynamic relationship between monetary policy variables and return on equity of the insurance firms. Findings revealed that, all the explanatory variables have positive effect on return on equity except treasury bill rate.  The unit root test found that the variables are stationary at first difference, the cointgration test found the presence of long run relationship while the granger causality test found a uni-directional causality. The study concludes that monetary policy has moderate effect on the return on equity of the insurance firms. We recommend that management of insurance companies should devise measures of managing the negative effects of the monetary policy instruments to enhance the performance of the insurance companies.

The Impact of MCAST Apprentices on Insurance Companies Operating in Malta - A Manager’s Perspective

2021 ◽  
Vol 5 (1) ◽  
pp. 127-153
Author(s):  
Joseph Schembri
Keyword(s):  
High Performance ◽  
Insurance Industry ◽  
Learning Experience ◽  
Cost Effective ◽  
Research Problem ◽  
Insurance Companies ◽  
Skilled Workers ◽  
Structured Interviews ◽  
Insurance Firms ◽  
The Impact

This study probes the MCAST insurance apprenticeship scheme and the impact of apprentices on the local insurance companies, acting as sponsors. This study is of particular relevance since the local insurance firms are experiencing growth but have the challenge of employee turnover and skills shortage. This research study investigates the work-based learning experience of students, the mentoring of apprentices and the supervising procedures adopted by MCAST and the insurance firms. The purpose is to analyse the impact of MCAST trainees on local insurance firms and depict practical recommendations to ameliorate the learning experience of the apprentices. The recommendations emanating from this study, assist MCAST to develop high-performance apprenticeship schemes and assist the local insurance industry, in the recruiting and training of young employees. This qualitative research gathers data through nine in-depth, semi-structured interviews and adopts the Grounded Theory Methodology to address the research problem and attain the stated objectives. The researcher adopts the constructivist approach incorporating an inductive and abductive stance. The findings emanating from the data illustrate the need to promote the insurance industry as a provider of stable and fulfilling careers with the possibility of job mobility. MCAST and the insurance firms need to enhance their collaboration to promote the insurance apprenticeship, among young learners, even at secondary level. An overhaul of the mentoring and supervising approach is needed to provide a work-based learning experience of excellence to MCAST apprentices. MCAST apprenticeship is considered by the insurance executives as the best training opportunity to recruit skilled workers and create networks. The scheme is cost effective to the firms and is considered as a long-term investment in human resources. A well-planned strategy to enhance collaboration and share knowledge between the leading VET provider of the Maltese Islands and the insurance industry is required for the benefit of the apprentices who are the future employees of the local insurance firms.

scholarly journals The Effect of Institutional Factors on the Profitability Risk in the Insurance Companies Listed in the Saudi Stock Market

2018 ◽  
Vol 11 (7) ◽  
pp. 12
Author(s):  
Abdulaziz Mohammed Alsahlawi
Keyword(s):  
Regression Analysis ◽  
Stock Market ◽  
Multiple Regression Analysis ◽  
Firm Size ◽  
Capital Market ◽  
Significant Relationship ◽  
Institutional Factors ◽  
Insurance Companies ◽  
Return On Assets ◽  
Insurance Firms

This paper conducted an investigation into the effect of institutional factors namely, leverage, capital market assets, and firm size on the risk of profitability among Saudi insurance companies listed in the Saudi Stock market (Tadawul). The paper also determined if the institutional theory has a significant impact on the profitability risk of Saudi insurance firms. On the basis of the findings from the multiple regression analysis that was conducted on the data obtained, the study’s institutional factors namely, leverage, capital market assets, and firm size had a significant relationship with the return on assets of the Saudi insurance companies, which in turn, increased their profitability. In other words, the findings supported the contribution of leverage, capital market assets and firm size to the profitability of Saudi insurance companies and provided considerable directions as to developing a strategy of profitability among the companies.

The Legal Aspect of Pension and Superannuation Funds

1938 ◽  
Vol 5 (02) ◽  
pp. 58-69
Author(s):  
H. Samuels
Keyword(s):  
Legal Aspect ◽  
Pension Funds ◽  
Insurance Companies ◽  
Pension Schemes ◽  
Set Up

I propose in this lecture to confine my attention for the most part to staff pension funds,i.e.funds set up and administered within firms. There are, of course, pension schemes the administration of which is entrusted to insurance companies and special legal points necessarily arise in that connexion as well, but I find on consideration that there is ample to occupy the time at my disposal if I apply myself particularly to those private or “house” schemes which find their expression in the setting up of a pension or superannuation fund. However, some of the points I raise and the views I express apply also to schemes carried on through insurance companies.

scholarly journals Insurance Purchase: Price, Product, Promotion and Consumers Attitude Perspectives

2018 ◽  
Vol 6 (1) ◽  
pp. 44
Author(s):  
OWOLABI Adenike Olanrewaju ◽  
AGBOOLA Omoniyi Oladipupo
Keyword(s):  
Significant Relationship ◽  
Survey Design ◽  
Insurance Companies ◽  
Buying Behavior ◽  
Policy Makers ◽  
Correlation And Regression Analysis ◽  
Insurance Product ◽  
Insurance Firms ◽  
Descriptive Survey ◽  
The Impact

This paper describes the impact of consumer’s attitude on the purchase of insurance product in Nigeria. The attitudes, most often negative, are mirrored through low patronage of insurance services. Data were collected through the use of self-structured closed questionnaire. The research adopted a descriptive survey design. One hundred and fifty (150) questionnaires were administered, however only one hundred and thirty two (132) were properly filled and good enough for data analysis. The Pearson Product Moment Correlation and Regression Analysis were used to test the hypotheses generated for the study at 0.05 alpha levels. The result of the study showed that there is a significant relationship between customer’s attitude and insurance product. Findings also revealed that there is a significant relationship between product awareness and price. Findings from the survey further revealed that promotion of insurance products have significant influence on consumers buying behavior. Insurance companies are advised to guarantee that their services are dependable and reliable, in that the services should not require an excessive amount of bureaucratic procedure of their customers in taking an insurance policy or getting their claim. Other feasible measures to boost patronage of insurance products were recommended for insurance firms and policy-makers.

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