scholarly journals Risk transfer beyond reinsurance: the added value of CAT bonds

2021 ◽  
Author(s):  
Tobias Götze ◽  
Marc Gürtler
Keyword(s):  
Risk Management ◽  
Default Risk ◽  
Management Strategies ◽  
Added Value ◽  
Insurance Companies ◽  
Data Set ◽  
Basis Risk ◽  
Cat Bonds ◽  
Risk Characteristics ◽  
Risk Management Strategies

AbstractReinsurance and CAT bonds are two alternative risk management instruments used by insurance companies. Insurers should be indifferent between the two instruments in a perfect capital market. However, the theoretical literature suggests that insured risk characteristics and market imperfections may influence the effectiveness and efficiency of reinsurance relative to CAT bonds. CAT bonds may add value to insurers’ risk management strategies and may therefore substitute for reinsurance. Our study is the first to empirically analyse if and under what circumstances CAT bonds can substitute for traditional reinsurance. Our analysis of a comprehensive data set comprising U.S. P&C insurers’ financial statements and CAT bond use shows that insurance companies’ choice of risk management instruments is not arbitrary. We find that the added value of CAT bonds mainly stems from non-indemnity bonds and reveal that (non-indemnity) CAT bonds are valuable under high reinsurer default risk, low basis risk and in high-risk layers.

scholarly journals Farmers’ Demand for Informal Risk Management Strategy and Weather Index Insurance: Evidence from China

2021 ◽  
Author(s):  
Yingmei Tang ◽  
Huifang Cai ◽  
Rongmao Liu
Keyword(s):  
Risk Management ◽  
Field Experiments ◽  
Management Strategies ◽  
Insurance Companies ◽  
Index Insurance ◽  
Insurance Demand ◽  
Weather Index ◽  
Weather Index Insurance ◽  
Risk Management Strategies ◽  
The Government

AbstractIn the absence of formal risk management strategies, agricultural production in China is highly vulnerable to climate change. In this study, field experiments were conducted with 344 households in Heilongjiang (Northeast China) and Jiangsu (East China) Provinces. Probit and logistic models and independent sample T-test were used to explore farmers’ demand for weather index insurance, in contrast to informal risk management strategies, and the main factors that affect demand. The results show that the farmers prefer weather index insurance to informal risk management strategies, and farmers’ characteristics have significant impacts on their adoption of risk management strategies. The variables non-agricultural labor ratio, farmers’ risk perception, education, and agricultural insurance purchase experience significantly affect farmers’ weather index insurance demand. The regression results show that the farmers’ weather index insurance demand and the influencing factors in the two provinces are different. Farmers in Heilongjiang Province have a higher participation rate than those in Jiangsu Province. The government should conduct more weather index insurance pilot programs to help farmers understand the mechanism, and insurance companies should provide more types of weather index insurance to meet farmers’ diversified needs.

scholarly journals An interactive web-GIS tool for risk analysis: a case study in the Fella River basin, Italy

2016 ◽  
Vol 16 (1) ◽  
pp. 85-101 ◽  
Author(s):  
Z. C. Aye ◽  
M. Jaboyedoff ◽  
M. H. Derron ◽  
C. J. van Westen ◽  
H. Y. Hussin ◽  
...  
Keyword(s):  
Risk Management ◽  
Risk Analysis ◽  
Management Strategies ◽  
Web Gis ◽  
Data Set ◽  
Prototype Development ◽  
Risk Management Strategies ◽  
Northeastern Italy ◽  
Study Sites

Abstract. This paper presents a prototype of an interactive web-GIS tool for risk analysis of natural hazards, in particular for floods and landslides, based on open-source geospatial software and technologies. The aim of the presented tool is to assist the experts (risk managers) in analysing the impacts and consequences of a certain hazard event in a considered region, providing an essential input to the decision-making process in the selection of risk management strategies by responsible authorities and decision makers. This tool is based on the Boundless (OpenGeo Suite) framework and its client-side environment for prototype development, and it is one of the main modules of a web-based collaborative decision support platform in risk management. Within this platform, the users can import necessary maps and information to analyse areas at risk. Based on provided information and parameters, loss scenarios (amount of damages and number of fatalities) of a hazard event are generated on the fly and visualized interactively within the web-GIS interface of the platform. The annualized risk is calculated based on the combination of resultant loss scenarios with different return periods of the hazard event. The application of this developed prototype is demonstrated using a regional data set from one of the case study sites, Fella River of northeastern Italy, of the Marie Curie ITN CHANGES project.

scholarly journals Perceptions of wheat producers towards risk and risk management strategies: A case study from Turkey

2019 ◽  
Vol 49 (12) ◽  
Author(s):  
Seyit Hayran
Keyword(s):  
Risk Management ◽  
Management Strategies ◽  
Policy Instruments ◽  
Data Set ◽  
Wheat Market ◽  
Risk Management Strategies ◽  
Risk Sources ◽  
The Government ◽  
The Impact

ABSTRACT: In this study, risk perception of wheat producers in Turkey was examined based on a case study conducted in Bitlis Province. The data set used in the study was obtained from 157 farmers randomly. Factor analysis was employed to classify risk sources and management strategies, and then multiple regression was used to investigate the relationship between farmers perceptions and some characteristic. Results of this study have shown that economic-based risks were perceived more strongly by farmers. Farmers’ also used more than one risk management strategy to minimize the impact of the risks they face. So, in order to ensure social and economic sustainability and predictability in wheat production and wheat market, the government should be considered preventive policy instruments and interventions to prevent fluctuations in input and output prices.

scholarly journals An interactive web-GIS tool for risk analysis: a case study in the Fella River Basin, Italy

2015 ◽  
Vol 3 (6) ◽  
pp. 4007-4057 ◽  
Author(s):  
Z. C. Aye ◽  
M. Jaboyedoff ◽  
M. H. Derron ◽  
C. J. van Westen ◽  
H. Y. Hussin ◽  
...  
Keyword(s):  
Risk Management ◽  
Risk Analysis ◽  
Management Strategies ◽  
Web Gis ◽  
Data Set ◽  
Prototype Development ◽  
Risk Management Strategies ◽  
Study Sites ◽  
Risk Managers

Abstract. This paper presents a prototype of an interactive web-GIS tool for risk analysis of natural hazards, in particular for floods and landslides, based on open-source geospatial software and technologies. The aim of the presented tool is to assist the experts (risk managers) in analysing the impacts and consequences of a certain hazard event in a considered region, providing an essential input to the decision making process in the selection of risk management strategies by responsible authorities and decision makers. This tool is based on the Boundless (OpenGeo Suite) framework and its client side environment for prototype development, and it is one of the main modules of a web-based collaborative decision support platform in risk management. Within this platform, the users can import necessary maps and information to analyse areas at risk. Based on provided information and parameters, loss scenarios (amount of damages and number of fatalities) of a hazard event are generated on-the-fly and visualized interactively within the web-GIS interface of the platform. The annualized risk is calculated based on the combination of resultant loss scenarios with different return periods of the hazard event. The application of this developed prototype is demonstrated using a regional data set from one of the case study sites, Fella River of North Eastern Italy, of the Marie Curie ITN CHANGES project.

scholarly journals Perception and risk management strategies for ranchers and their determinants: a case study from Turkey

2021 ◽  
Vol 51 (6) ◽  
Author(s):  
Seyit Hayran ◽  
Murak Külekçi ◽  
Aykut Gül
Keyword(s):  
Risk Management ◽  
Management Strategies ◽  
Farm Income ◽  
Least Squares Regression ◽  
Data Set ◽  
Income Uncertainty ◽  
Perceptions Of Risk ◽  
Risk Management Strategies ◽  
Risk Sources ◽  
The Government

ABSTRACT: In this study, beef cattle farmers’ perceptions of risk and risk management strategies, and their determinants were analyzed using factor analysis and partial least squares regression analysis. The data set used in this study came from a survey conducted in Erzurum Province. The results demonstrated that variability in fodder price, insufficient farm income, uncertainty in government policies were perceived as the most important risks. Clean cattle shelter, off-farm income, monitoring and preventing livestock diseases were perceived as the most important risk management strategies. Results, also, demonstrated that some characteristics of farmers affected farmers’ perceptions. In this study, it was identified that the most important risk sources were economics-based. So, it was recommended that the government policy should be focused on preventing the fluctuations in input/output prices.

scholarly journals Turkish Insurance Companies’ Risk Management Strategies and Structures: A Survey Study

2020 ◽  
Vol 12 (8) ◽  
pp. 12
Author(s):  
Suna Ozyuksel ◽  
Murat Gezgin
Keyword(s):  
Risk Management ◽  
Insurance Industry ◽  
Management Strategies ◽  
Cyber Attacks ◽  
Survey Study ◽  
Insurance Companies ◽  
Insurance Sector ◽  
Political Risks ◽  
Risk Management Strategies ◽  
Set Up

Insurance industry is one of the cornerstones of both the financial system and the economy as it undertakes global risks and minimizes losses. The compensation of major losses by insurance companies means rapid recovery and resumption for investors. The insurance sector is very important for the development of the country's economy as it contributes premium volume and its support to investors as for compensation of the losses. However, the insurance sector faces a great deal of risks. Therefore, it is of importance for insurance companies to have a robust risk management system to constitute a basis for the growth of economy. Risk management enables insurance companies to identify measuring and analyzing risks, safeguard their assets, minimize potential risks and take them under control. The aim of this study is the evaluation of the risks assumed by insurance companies in Turkey and their risk management perspectives to struggle such major risks through a survey. This survey makes an evaluation about how insurance companies’ risk management departments are structured, risks that insurance companies foresee, their strategies to deal with such risks. Among the important findings of the survey; Top 10 risks for insurance companies are: “interest rate and foreign exchange rate fluctuation, political risks, economic slowdown, economic crisis, regulations, cyber-attacks, incompliance with the applicable legislation, increasing competition, digitalization/insurtech, business continuity interruption” and the second finding is Turkish insurance industry’s risk management set-up has a robust structure even though it has a small share in global insurance market and Turkish financial sector.

The management of risk in a dryland environment

2011 ◽  
pp. 13-21
Author(s):  
D.I. Gray ◽  
J.I. Reid ◽  
D.J. Horne
Keyword(s):  
Risk Management ◽  
Service Providers ◽  
Management Strategies ◽  
Subterranean Clover ◽  
Farming Systems ◽  
Market Risk ◽  
Farm Size ◽  
Forage Crops ◽  
Risk Management Strategies ◽  
Upside Risk

A group of 24 Hawke's Bay hill country farmers are working with service providers to improve the resilience of their farming systems. An important step in the process was to undertake an inventory of their risk management strategies. Farmers were interviewed about their farming systems and risk management strategies and the data was analysed using descriptive statistics. There was considerable variation in the strategies adopted by the farmers to cope with a dryland environment. Importantly, these strategies had to cope with three types of drought and also upside risk (better than expected conditions), and so flexibility was critical. Infra-structure was important in managing a dryland environment. Farmers chose between increased scale (increasing farm size) and geographic dispersion (owning a second property in another location) through to intensification (investing in subdivision, drainage, capital fertiliser, new pasture species). The study identified that there may be scope for further investment in infra-structural elements such as drainage, deeper rooting alternative pasture species and water harvesting, along with improved management of subterranean clover to improve flexibility. Many of the farmers used forage crops and idling capacity (reduced stocking rate) to improve flexibility; others argued that maintaining pasture quality and managing upside risk was a better strategy in a dryland environment. Supplementary feed was an important strategy for some farmers, but its use was limited by contour and machinery constraints. A surprisingly large proportion of farmers run breeding cows, a policy that is much less flexible than trading stock. However, several farmers had improved their flexibility by running a high proportion of trading cattle and buffer mobs of ewe hoggets and trade lambs. To manage market risk, the majority of farmers are selling a large proportion of their lambs prime. Similarly, cattle are either sold prime or store onto the grass market when prices are at a premium. However, market risk associated with the purchase of supplements and grazing was poorly managed.

The Effects of Decision Aid Orientation on Risk Factor Identification and Audit Test Planning

2002 ◽  
Vol 21 (2) ◽  
pp. 39-56 ◽  
Author(s):  
Jean C. Bedard ◽  
Lynford E. Graham
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Decision Aid ◽  
Decision Aids ◽  
Management Strategies ◽  
Risk Identification ◽  
Matched Pair ◽  
Audit Planning ◽  
Audit Firms ◽  
Risk Management Strategies

In auditing, risk management involves identifying client facts or issues that may affect engagement risk, and planning evidence-gathering strategies accordingly. The purpose of this paper is to examine whether auditors' identification of risk factors and planning of audit tests is affected by decision aid orientation, i.e., a “negative” focus wherein client risk and its consequences are emphasized, or a “positive” focus where such factors are not emphasized. Specifically, we expect that auditors will identify more risk factors using a negatively oriented risk identification decision aid, but only when engagement risk is relatively high. We address this issue in the context of auditors' knowledge of actual clients, manipulating decision aid orientation as negative or positive in a matched-pair design. Results show that auditors using the negative decision aid orientation identify more risk factors than do those using a positive orientation, for their higher-risk clients. We also find that decisions to apply substantive tests are more directly linked to specific risk factors identified than to direct risk assessments. Further, our results show that auditors with repeat engagement experience with the client identify more risk factors. The findings of this study imply that audit firms may improve their risk management strategies through simple changes in the design of decision aids used to support audit planning.

scholarly journals Evaluation of Physical Risk during Necropsy and Morgue Activities as Risk Management Strategy

2021 ◽  
Vol 18 (16) ◽  
pp. 8266
Author(s):  
Zoe Del Fante ◽  
Nicola Di Fazio ◽  
Adriano Papale ◽  
Paola Tomao ◽  
Fabio Del Duca ◽  
...  
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Management Strategies ◽  
Risk Management Strategy ◽  
Work Related ◽  
Activity Measurements ◽  
Risk Management Strategies ◽  
Physical Risk ◽  
Critical Issues ◽  
Load Handling

Physical risk assessments allow us to understand work-related critical issues, thus representing a useful tool in risk management strategies. In particular, our study focuses on the identification of already known and emerging physical risks related to necropsy and morgue activities, as well as crime scene investigations. The aim of our study is, therefore, to identify objective elements in order to quantify exposure to such risk factors among healthcare professionals and working personnel. For the research of potentially at-risk activities, data from the Morgue of Policlinico Umberto I Hospital in Rome were used. The scientific literature has been reviewed in order to assess the risks associated with morgue activity. Measurements were performed on previously scheduled days, in collaboration with the activities of different research units. The identified areas of risk were: microclimate; exposure to noise and vibrations; postural and biomechanical aspects of necropsy activities. The obtained results make it possible to detect interindividual variability in exposure to many of the aforementioned risk factors. In particular, the assessment of microclimate did not show significant results. On the contrary, exposure to vibrations and biomechanical aspects of load handling have shown potential risk profiles. For this reason, both profiles have been identified as possible action targets for risk management strategies.

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