scholarly journals A Study on Underwriting Cycle of Property Insurance Industry of China

2012 ◽  
Vol 11 (1) ◽  
pp. 261-267
Author(s):  
Lin Zhang ◽  
Linjuan Tang
Keyword(s):  
Insurance Industry ◽  
Property Insurance ◽  
Underwriting Cycle

Configuration analysis of influencing factors of operating efficiency based on fsQCA: evidence from China’s property insurance industry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zhiguang Li ◽  
Yaokuang Li ◽  
Wei Zhang
Keyword(s):  
Technical Efficiency ◽  
Insurance Industry ◽  
Qualitative Comparative Analysis ◽  
Insurance Companies ◽  
Operating Efficiency ◽  
Content Type ◽  
Leverage Ratio ◽  
Property Insurance ◽  
High Loss ◽  
Core Conditions

Purpose Based on the perspective of complexity theory, the operation process of property insurance companies can be regarded as a complex dynamic nonlinear chaotic system. This paper aims to measure the operating efficiency of 29 Chinese domestic property and casualty (P&C) companies and 18 foreign-invested P&C companies from 2011 to 2017 and outline the path to achieving high-quality development. Design/methodology/approach The data were obtained from the Chinese Insurance Yearbook and China Statistical Yearbook 2012–2018. The data envelopment analysis method was used to calculate the technical efficiency of property insurance companies and fuzzy set qualitative comparative analysis is used for configuration analysis of determinants affecting technical efficiency. Findings This paper founds the average technical efficiency of Chinese domestic P&C insurance companies was 0.914 and that of foreign-invested P&C insurance companies was 0.895. The average total factor productivity of Chinese domestic P&C insurance companies was 1.058 and that of foreign-invested P&C insurance companies was 1.051. There were three modes to improve the company’s technical efficiency, with high loss ratio and low reinsurance ratio, poor employee education and higher leverage ratio and high leverage ratio and low reinsurance ratio as the core conditions. Originality/value This study puts forward four applicable, targeted and proven ways to improve the technical efficiency of China’s P&C insurance industry. These configurations were verified by the cases of existing property insurance companies, which can provide practical references for the insurance industry.

Knowledge Learning of Insurance Risks Using Dependence Models

2020 ◽  
Author(s):  
Zifeng Zhao ◽  
Peng Shi ◽  
Xiaoping Feng
Keyword(s):  
Large Scale ◽  
Predictive Analytics ◽  
Insurance Industry ◽  
Spatial Association ◽  
Capital Allocation ◽  
Risk Profile ◽  
Composite Likelihood ◽  
Multiple Sources ◽  
Property Insurance ◽  
Dependence Models

Learning the customers’ experience and behavior creates competitive advantages for any company over its rivals. The insurance industry is an essential sector in any developed economy and a better understanding of customers’ risk profile is critical to decision making in all aspects of insurance operations. In this paper, we explore the idea of using copula-based dependence models to learn the hidden risk of policyholders in property insurance. Specifically, we build a novel copula model to accommodate the dependence over time and over space among spatially clustered property risks. To tackle the computational challenge caused by the discreteness feature of large-scale insurance data, we propose an efficient multilevel composite likelihood approach for parameter estimation. Provided that latent risk induces correlation, the proposed customer learning method offers improved predictive analytics by allowing insurers to borrow strength from related risks in predicting new risks and also helps reveal the relative importance of the multiple sources of unobserved heterogeneity in updating policyholders’ risk profile. In the empirical study, we examine the loss cost of a portfolio of entities insured by a government property insurance program in Wisconsin. We find both significant temporal and spatial association among property risks. However, their effects on the predictive distribution of loss cost are different for the new and renewal policyholders. The two sources of dependence are complements for the former and substitutes for the latter. These findings are shown to have substantial managerial implications in key insurance operations such as experience rating, capital allocation, and reinsurance arrangement.

An integrated flood risk assessment model for property insurance industry in Taiwan

2011 ◽  
Vol 58 (3) ◽  
pp. 1295-1309 ◽  
Author(s):  
Wen-Ko Hsu ◽  
Pei-Chiung Huang ◽  
Ching-Cheng Chang ◽  
Cheng-Wu Chen ◽  
Dung-Moung Hung ◽  
...  
Keyword(s):  
Risk Assessment ◽  
Flood Risk ◽  
Insurance Industry ◽  
Assessment Model ◽  
Risk Assessment Model ◽  
Flood Risk Assessment ◽  
Property Insurance

scholarly journals Insurance Cycles, Spanning and Regulation

2019 ◽  
Vol 5 (4) ◽  
pp. p465
Author(s):  
Arthur M.B. Hogan ◽  
David Nickerson
Keyword(s):  
Asset Pricing ◽  
Insurance Industry ◽  
Insurance Coverage ◽  
Market Failures ◽  
Complete Markets ◽  
Insurance Pricing ◽  
Asset Pricing Theory ◽  
Simple Variant ◽  
Pricing Theory ◽  
Underwriting Cycle

This paper offers a novel explanation of the financial underwriting cycle in the property-liability insurance industry. By doing so it resolves that significant anomaly in asset pricing theory posed by cycles in the efficient pricing of insurance coverage. In contrast to the reliance on a variety of institutional or capital market failures underlying all previous explanations of this cycle, we directly augment the complete-markets environment of traditional asset-pricing models through the presence of a single source of risk that cannot be fully hedged through existing financial markets. We realistically interpret this source of risk as unforecastable noise in the implementation of insurance regulations. Cycles in the value of underwriting insurance coverage can arise in this simple variant of a standard complete-markets pricing model owing to the effect of such regulatory risk. We offer a sufficient condition for a stable cycle to endogenously exist in market equilibrium and illustrate this condition in the context of a representative insurance firm and a regulator pursuing a countercyclical policy with noisy implementation. Interestingly, while insurance pricing is efficient in the absence of the regulator, cyclic pricing and underwriting profitability can be induced by a countercyclical regulator policy designed to stabilize the very cycle it creates.

Research on the improvement of technical efficiency of China's property insurance industry: a fuzzy-set qualitative comparative analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zhiguang Li ◽  
Yaokuang Li ◽  
Dan Long
Keyword(s):  
Comparative Analysis ◽  
Technical Efficiency ◽  
Fuzzy Set ◽  
Insurance Industry ◽  
Qualitative Comparative Analysis ◽  
Insurance Companies ◽  
Operating Efficiency ◽  
Scale Efficiency ◽  
Content Type ◽  
Property Insurance

PurposeFrom the perspective of cause and effect, the operational processes of property insurance companies can be considered as historical events. The purpose of this study is to measure the operating efficiency of China's property insurance industry, explore the determinants that affect technical efficiency and outline the path to achieving high-quality development.Design/methodology/approachWe chose 44 Chinese property insurance companies as research objects. The data were obtained from the Chinese Insurance Yearbook and China Statistical Yearbook 2015–2017. First, the data envelopment analysis (DEA) method was used to calculate the technical efficiency of property insurance companies. Then, Tobit regression and quantile regression were adopted to explore the influencing factors of technical efficiency. Finally, the fuzzy-set qualitative comparative analysis (fsQCA) method was employed to summarize the path to improving the operating efficiency of property insurance companies.FindingsThe empirical results in the first stage suggested that the operation efficiency of China's property insurance industry was technically inefficient, and the scale efficiency was relatively better than the pure technical efficiency. In the second stage, we observed that the drivers for firm size, reinsurance rate, claim ratio and equity restriction were important determinants of an insurance firm's efficiency.Research limitations/implicationsWe also put forward four applicable, targeted and proven ways to improve the technical efficiency of property insurance companies. These configurations are verified by cases of existing property insurance companies, which can provide practical references for the insurance industry.Originality/valueOur research enriches the insurance literature and efficiency methods, particularly regarding the specific paths of improving the technical efficiency. The relationship between elements and results is analyzed from a systematic perspective, and the research results are not only more consistent with what logic might imply but also more instructive for the improvement of reality.

The Fuzzy Comprehensive Assessment of Brand Competitiveness of Property Insurance Companies

2011 ◽  
Vol 55-57 ◽  
pp. 1489-1493 ◽  
Author(s):  
Shao Fu Song ◽  
Guang Jin Li ◽  
Ying Sheng Su
Keyword(s):  
Insurance Industry ◽  
Evaluation Model ◽  
Comprehensive Assessment ◽  
Insurance Companies ◽  
Analytic Hierarchy ◽  
Fuzzy Comprehensive Assessment ◽  
Property Insurance ◽  
Weighting Matrix ◽  
Brand Competitiveness ◽  
Hierarchy Process

This paper presents a practical assessment of brand competitiveness in property insurance industry through Fuzzy Comprehensive Assessment. The multicriteria evaluation model and weighting matrix have been determined by the Analytic Hierarchy Process (AHP). The synthetically appraisal score of property insurance companies can be estimated by Fuzzy Comprehensive Assessment, which contains a two-stage decision. At the end of this paper, three listed property insurance companies have been evaluated following the above methods.

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