scholarly journals Political risk factors in South Africa: Sources, analysis and insurance flexibility

2013 ◽  
Vol 3 (1) ◽  
pp. 34-41
Author(s):  
Rudolf Essel ◽  
Frederik J. Mostert
Keyword(s):  
Risk Factors ◽  
South Africa ◽  
Emerging Market ◽  
Political Risk ◽  
Literature Study ◽  
Empirical Survey ◽  
Business Operations ◽  
Financial Failure ◽  
Financial Decision ◽  
Risk Insurance

Political risk factors are of prime importance to business operations around the world, as they may impact negatively on the financial performance thereof and may even lead to the financial failure of enterprises and industries. As political risk factors are often abundant in developing countries with emerging market economies, this study is undertaken in South Africa which is classified accordingly. The objective of this research focuses on the improvement of financial decision-making concerning the sources, analysis and insurance flexibility of political risk factors. To achieve the objective of the paper, a literature study and an empirical survey, involving the agents of political risk insurance in South Africa, were undertaken. Due attention is paid to identifying the most important sources of political risk factors, as well as the analysis of the political risk factors by the underwriters concerned. The importance of flexibility concerning the various aspects of political risk insurance is also addressed. The perceptions of the agents of political risk insurance in South Africa provide a valuable contribution to the empirical results and conclusions of this paper.

scholarly journals The importance of the impact of political risk factors in South Africa

2013 ◽  
Vol 3 (1) ◽  
pp. 74-81
Author(s):  
Rudolf Essel ◽  
Frederik J. Mostert
Keyword(s):  
Risk Factors ◽  
South Africa ◽  
Market Economy ◽  
Emerging Market ◽  
Political Risk ◽  
Geographical Region ◽  
Literature Study ◽  
Empirical Survey ◽  
Geographical Regions ◽  
The Impact

Political risk factors often impact negatively on the financial results of an enterprise, industry, geographical region or an entire country. In severe cases they may even lead to financial disasters. Previous research (by Essel) identified 10 specific political risk factors which are common to emerging market economies. As South Africa is a developing country with an emerging market economy, these 10 political risk factors should also be present in this country. This paper focuses on the importance of the impact of political risk factors on an agent’s total annual claims amount when underwriting political risk insurance in South Africa. The objective of this research paper embodies the improvement of financial decision-making by a particular enterprise, industry, geographical region or country operating in an emerging market economy, pertaining to the importance of the impact of political risk factors. A literature study as well as an empirical survey was done to achieve the study’s objective. The conclusions of this research should also be valuable to other enterprises, industries, geographical regions or countries which operate in an emerging market economy.

scholarly journals The continuous market cycle of the short term insurance industry

2012 ◽  
Vol 2 (1) ◽  
pp. 22-29
Author(s):  
Liezel Essel ◽  
Frederik J. Mostert ◽  
Jan Hendrik Mostert
Keyword(s):  
South Africa ◽  
Insurance Industry ◽  
Emerging Market ◽  
Literature Study ◽  
Short Term ◽  
Financial Decision Making ◽  
Empirical Survey ◽  
Term Insurance ◽  
Financial Decision ◽  
The Impact

The short-term insurance industry is a cyclical type of business due to the impact of the continuous market cycle. This cycle has a growth phase, soft market phase, hard market phase and a break-even phase. The objective of the research paper focuses on the improvement of financial decision-making when executives of the short-term insurance industry are managing their business during the various phases of the continuous market cycle. Both a literature study and an empirical survey were necessary to achieve the research objective. The empirical survey included the contributions of the top nine commercial and corporate short-term insurers in South Africa. They represented more than 77% of the total gross written premiums in 2009 and can thus be considered as the leaders of the short-term insurance industry in this country. The conclusions of the study should be valuable to other developing countries with emerging market economies as South Africa is also classified as such. The study focused on the various factors which may cause the continuous market cycle, the problem areas which the executives experience concerning the continuous market cycle, and how often various factors are adjusted by the short-term insurers to account for changes in the continuous market cycle.

scholarly journals The claims handling process of property insurance in South Africa

2011 ◽  
Vol 8 (4) ◽  
pp. 155-164
Author(s):  
D Naudé ◽  
Frederik J. Mostert ◽  
Jan Hendrik Mostert
Keyword(s):  
South Africa ◽  
Emerging Market ◽  
Literature Study ◽  
Short Term ◽  
Property Insurance ◽  
Financial Decision Making ◽  
Empirical Survey ◽  
Term Insurance ◽  
Financial Decision ◽  
Main Factors

Property insurance is the second largest class of short-term insurance in South Africa. As South Africa is a developing country and has an emerging market economy, the conclusions of this paper, which are based on a literature study and an empirical survey, should accordingly also be valuable to short-term insurers in other countries with emerging market economies. The objective of this research paper endeavors to improve financial decision-making relating to the claims handling process of property insurance. It therefore focuses on the insurance of buildings, the contents of buildings, as well as all-risks insurance. After paying attention to the main factors, necessary to contemplate in the claims handling process of each of the three types of subject matter, the applicable problem areas and the effectiveness of the short-term insurers who participate in the empirical survey, are addressed.

scholarly journals Reinsurance by short-term reinsurers in South Africa

2016 ◽  
Vol 6 (1) ◽  
pp. 35-42
Author(s):  
C L R Fernhout ◽  
Frederik J. Mostert ◽  
Jan Hendrik Mostert
Keyword(s):  
South Africa ◽  
South African ◽  
Emerging Market ◽  
Primary Study ◽  
Literature Study ◽  
Short Term ◽  
Financial Decision Making ◽  
Empirical Survey ◽  
Brics Countries ◽  
Financial Decision

The short-term reinsurance process usually involves three parties, namely the insurer, the reinsurer and the original policyholder, as the insurer cedes a part of the covered risk of the policyholder to the reinsurer. This research however addresses the perceptions of reinsurers regarding their reinsurance activities, where the reinsurer sells reinsurance to other insurance entities (viz. insurers and reinsurers), as well as buys reinsurance from other insurance entities. The crux of short-term reinsurance is therefore mutually loss sharing between the various insurance entities. The objective of this research focuses on the improvement of financial decision-making regarding the reinsurance operations of the reinsurers. To achieve this objective a literature study was undertaken to provide adequate background to compile a questionnaire for the empirical survey. The primary study embodies the perceptions of the South African short-term reinsurers regarding the following aspects: the various reasons why reinsurance occurs; the contracts / methods of reinsurance; the bases / forms of reinsurance; and the factors which determine the retention levels of a reinsurer. South Africa is classified as a developing economy, is a member of the BRICS countries and has an emerging market economy. The empirical results should therefore also be valuable to other countries which are classified similarly.

scholarly journals Liquidity management by South African banks

2012 ◽  
Vol 9 (3) ◽  
pp. 52-58
Author(s):  
Wessel Lourens Crafford ◽  
Frederik J. Mostert ◽  
Jan Hendrik Mostert
Keyword(s):  
South Africa ◽  
South African ◽  
Banking Industry ◽  
Emerging Market ◽  
Management Process ◽  
Literature Study ◽  
Liquidity Management ◽  
Financial Decision Making ◽  
Empirical Survey ◽  
Financial Decision

The management of liquidity is of prime importance to banks. This management process should be carefully planned and continuously managed to master a global and/or national financial crisis. The objective of this research paper embodies the improvement of financial decision-making by banks regarding the management of their liquidity. To achieve this objective, a literature study was initially done. An empirical survey followed thereafter, focusing on the 10 biggest banks in South Africa. They are the leaders of the South African banking industry, and as South Africa is a developing country with an emerging market economy, the conclusions of the study may also be valuable to banking industries of similar countries. The importance of the liquidity management factors, the problem areas surrounding this topic, as well as how often the requirements are adjusted to ensure proper and effective liquidity management are addressed.

scholarly journals The valuation of external projects by South African banks

2013 ◽  
Vol 10 (4) ◽  
pp. 461-468
Author(s):  
Adriaan Albert Tickner ◽  
Frederik J. Mostert ◽  
Jan Hendrik Mostert
Keyword(s):  
Decision Making ◽  
South African ◽  
Economic Conditions ◽  
Literature Study ◽  
Financial Decision Making ◽  
Empirical Survey ◽  
Financial Pressure ◽  
Determining Factors ◽  
Valuation Process ◽  
Financial Decision

While banks are in competition to expand their market share, their credit portfolios may become less diversified without adequate reward for the increased risks. Even well-capitalised banks may come under financial pressure when global economic conditions turn. This research paper focuses on the valuation by banks of the clients’ projects to determine whether and to which extent the banks are going to provide financing for their clients’ projects. The objective of this research evolves around the improvement of financial decision-making by banks when they are valuating the projects of their clients. The objective of this research is achieved by means of a literature study as well as an empirical survey which focuses on the top banks in South Africa. The determining factors which are considered by banks when the projects of clients are valuated, the problem areas experienced by the banks during the valuation process and the adjustments requested by banks are amongst the aspects that are addressed.

The effects of political, economic and financial components of country risk on housing prices in South Africa

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Paul-Francois Muzindutsi ◽  
Sanelisiwe Jamile ◽  
Nqubeko Zibani ◽  
Adefemi A. Obalade
Keyword(s):  
Risk Factors ◽  
South Africa ◽  
Housing Market ◽  
Time Series Data ◽  
Housing Prices ◽  
Political Risk ◽  
Country Risk ◽  
Series Data ◽  
Content Type ◽  
Short Run

Purpose The housing market in South Africa has the potential to drive economic growth and attract foreign investment, but it can be affected by various risk factors. This paper aims to conduct an empirical analysis of the effect of country risk components on the housing market in South Africa. Design/methodology/approach Linear and nonlinear autoregressive distributed lag (ARDL) models were used to evaluate the effects of the economic, financial and political risk factors of country risk on the prices of different segments of houses based on 276 monthly time-series data from January1995 to December 2015. Findings First, the results established that the three housing indices were more sensitive to political risk in the long run. Second, short run results showed that the three housing indices were largely influenced by their own preceding adjustments in the short run albeit minimal influences from political risk. Third, large housing segments indicated a higher magnitude of the country risk effect in South Africa. Originality/value This paper concluded that the response of housing prices to changes in the country risk components differed across the three segments of the housing market in South Africa. Consequently, this study presented the first comparison of the reactions of different housing segments to different components country risk.

scholarly journals The underwriting process of engineering insurance in South Africa

2014 ◽  
Vol 4 (1) ◽  
pp. 38-45
Author(s):  
D K Murphy ◽  
Frederik J. Mostert ◽  
Jan Hendrik Mostert
Keyword(s):  
South Africa ◽  
South African ◽  
Emerging Market ◽  
Secondary Data ◽  
Primary Data ◽  
Opinion Survey ◽  
Short Term ◽  
Different Types ◽  
Financial Decision ◽  
Engineering Insurance

Engineering insurance covers damage to plant, machinery and other engineering equipment such as boilers, computers, cranes and lifts. The underwriting process of engineering insurance is therefore complex as different types of risks from a big variety of industries are involved. The underwriting process of engineering insurance often requires specialists such as engineers to identify and analyse the particular risks. The objective of this research paper focuses on the improvement of financial decision-making regarding the underwriting process of engineering insurance. Secondary as well as primary data were necessary to reach this objective. The secondary data addressed the underwriting process of engineering insurance as well as the underwriting factors which should be considered by the short-term insurers when they are underwriting engineering insurance. The empirical study embodied an opinion survey which included the top 10 South African short-term insurers which underwrite engineering insurance. As they are the market leaders in this country concerning engineering insurance, due attention was paid to obtain their perceptions regarding the importance of the underwriting factors of engineering insurance, the problem areas which the respondents encounter during the underwriting process, as well as how often the respondents need to adjust the policy stipulations to take the underwriting factors into account. As South Africa is a developing country and has an emerging market economy, the conclusions of this study should also be valuable to other countries which are classified similarly.

scholarly journals Financial innovation in retail banking in South Africa

2016 ◽  
Vol 13 (3) ◽  
pp. 393-401
Author(s):  
B Smit ◽  
Frederik J. Mostert ◽  
Jan Hendrik Mostert
Keyword(s):  
South Africa ◽  
Empirical Study ◽  
Developing Economies ◽  
Emerging Market ◽  
Distribution Channel ◽  
Financial Innovation ◽  
Retail Banking ◽  
Capital Investments ◽  
Literature Study ◽  
Financial Innovations

Innovation in general refers to an action to do something differently. Financial innovation, which embodies the topic of this research, has therefore the creation of financial products, services and/or systems in mind in order to satisfy the needs of customers and clients and ultimately to improve the financial performance of the enterprises concerned. As the requirements of customers and clients change continuously, financial innovations are important for the survival of enterprises. Capital investments to accommodate financial innovations should be considered very carefully as they will determine the business activities of an enterprise for many years. The objective of this research focuses on the improvement of financial decision-making by executive managers in retail banking when they are engaging in financial innovations. A literature study represented the start of this research to provide a proper basis for compiling the empirical study’s questionnaire. The empirical study consisted of an opinion survey where the three pillars of financial innovation were addressed, viz.: products and services innovation, organisational innovation and distribution channel innovation. The empirical study indicated amongst others the importance of these three pillars of financial innovations as perceived by eight of the largest banks in South Africa. Furthermore, the obstacles to financial innovations also received the necessary attention. The empirical results of this research should be valuable to countries which are classified as developing economies with emerging market economies, as South Africa is a member of this group

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