scholarly journals Mathematical Risk Modeling: an Application in Three Cases of Insurance Contracts

2019 ◽  
Vol 8 (6) ◽  
pp. 01-10
Author(s):  
Ramzi Drissi ◽  
Keyword(s):  
Life Insurance ◽  
Financial Risk ◽  
General Definition ◽  
Risk Modeling ◽  
Insurance Contracts ◽  
Lack Of Information ◽  
Different Types ◽  
Definition Of ◽  
Risk Determinants ◽  
Risk Insurance

Risk is often defined as the degree of uncertainty regarding the future. This general definition of risk can be extended to define different types of risks according to the source of the underlying uncertainty. In this context, the objective of this paper is to mathematically model risks in insurance. The choice of methods and techniques that allow the construction of the model significantly influence the responses obtained. We approach these different issues by modeling risks in three base cases: basic insurance of goods, life insurance, and financial risk insurance. Our findings show that risk modeling allowed us to better measure certain events, but did not allow us to predict them accurately due to a lack of information. Therefore, good modeling of the risk determinants makes it possible to modify the probability associated with the occurrence of a risk. While it cannot predict exactly when a risk will occur, it can help make decisions that will reduce its effects. Keywords: Basic insurance, Life insurance, Mathematical models, Financial risk, Biometric function.

scholarly journals The Reduction of Initial Reserves Using the Optimal Reinsurance Chains in Non-Life Insurance

Mathematics ◽  
2021 ◽  
Vol 9 (12) ◽  
pp. 1350
Author(s):  
Galina Horáková ◽  
František Slaninka ◽  
Zsolt Simonka
Keyword(s):  
Life Insurance ◽  
Continuous Time ◽  
Ruin Probability ◽  
Proportional Reinsurance ◽  
Insurance Risk ◽  
Optimal Reinsurance ◽  
Insurance Contracts ◽  
Time Period ◽  
Different Types ◽  
Capital Injections

The aim of the paper is to propose, and give an example of, a strategy for managing insurance risk in continuous time to protect a portfolio of non-life insurance contracts against unwelcome surplus fluctuations. The strategy combines the characteristics of the ruin probability and the values VaR and CVaR. It also proposes an approach for reducing the required initial reserves by means of capital injections when the surplus is tending towards negative values, which, if used, would protect a portfolio of insurance contracts against unwelcome fluctuations of that surplus. The proposed approach enables the insurer to analyse the surplus by developing a number of scenarios for the progress of the surplus for a given reinsurance protection over a particular time period. It allows one to observe the differences in the reduction of risk obtained with different types of reinsurance chains. In addition, one can compare the differences with the results obtained, using optimally chosen parameters for each type of proportional reinsurance making up the reinsurance chain.

scholarly journals The complexity of DNA sequences. Different approaches and definitions

2020 ◽  
Vol 15 (2) ◽  
pp. 313-337
Author(s):  
Vladimir D. Gusev ◽  
Liubov A. Miroshnichenko
Keyword(s):  
Dna Sequences ◽  
Quantitative Characteristic ◽  
Low Complexity ◽  
Structural Features ◽  
General Definition ◽  
Symbolic Sequence ◽  
Different Types ◽  
Definition Of

An important quantitative characteristic of symbolic sequence (texts, strings) is complexity, which reflects at the intuitive level the degree of their "non-randomness". A.N. Kolmogorov formulated the most general definition of complexity. He proposed measuring the complexity of an object (symbolic sequence) by the length of the shortest descriptions by which this object can be uniquely reconstructed. Since there is no program guaranteed to search for the shortest description, in practice, various algorithmic approximations considered in this paper are used for this purpose. Along with definitions of complexity, suggesting the possibility of reconstruction a sequence from its "description", a number of measures are considered that do not imply such restoration. They are based on the calculation of some quantitative characteristics. Of interest is not only a quantitative assessment of complexity, but also the identification and classification of structural regularities that determine its specific value. In one form or another, they are expressed in the demonstration of repetition in the broadest sense. The considered measures of complexity are conventionally divided into statistical ones that take into account the frequency of occurrence of symbols or short “words” in the text, “dictionary” ones that estimate the number of different “subwords” and “structural” ones based on the identification of long repeating fragments of text and the determination of relationships between them. Most of the methods are designed for sequences of an arbitrary linguistic nature. The special attention paid to DNA sequences, reflected in the title of the article, is due to the importance of the object, manifestations of repetition of different types, and numerous examples of using the concept of complexity in solving problems of classification and evolution of various biological objects. Local structural features found in the sliding window mode in DNA sequences are of considerable interest, since zones of low complexity in the genomes of various organisms are often associated with the regulation of basic genetic processes.

scholarly journals Risk-Minimizing Hedging Strategies for Unit-Linked Life Insurance Contracts

1998 ◽  
Vol 28 (1) ◽  
pp. 17-47 ◽  
Author(s):  
Thomas Møller
Keyword(s):  
Financial Market ◽  
Life Insurance ◽  
Trading Strategies ◽  
Risk Minimization ◽  
Change Of Measure ◽  
Insurance Benefits ◽  
Insurance Contracts ◽  
Hedging Strategies ◽  
Different Types ◽  
Risk Processes

AbstractA unit-linked life insurance contract is a contract where the insurance benefits depend on the price of some specific traded stocks. We consider a model describing the uncertainty of the financial market and a portfolio of insured individuals simultaneously. Due to incompleteness the insurance claims cannot be hedged completely by trading stocks and bonds only, leaving some risk to the insurer. The theory of risk-minimization is briefly reviewed and applied after a change of measure. Risk-minimizing trading strategies and the associated intrinsic risk processes are determined for different types of unit-linked contracts. By extending the model to the situation where certain reinsurance contracts on the insured lives are traded, the direct insurer can eliminate the risk completely. The corresponding self-financing strategies are determined.

scholarly journals Attitudes of Rural Customers about the Need for Life Insurance Protection – A Study in Udupi District

2021 ◽  
Vol 8 (S1-Feb) ◽  
pp. 202-211
Author(s):  
Udaya Shetty K
Keyword(s):  
Life Insurance ◽  
Rural Areas ◽  
Financial Risk ◽  
Insurance Companies ◽  
Insurance Agents ◽  
Insurance Sector ◽  
Rural And Urban ◽  
Difficult Time ◽  
Risk Insurance

Insurance, in its many forms, touches the life of virtually every person in this country. Any society could not function effectively, efficiently or safely as it does were insurance-free. If there was no insurance, there would be so much uncertainty and exposure to loss that no business would be able to function and exist. Business would have an extremely difficult time obtaining any type of financing because few lenders would risk their capital without having a guarantee of safety for their investments. Insurance’s value to society is enormous and irreplaceable. Insurance protects hard-earned, accumulated assets while minimizing financial risk. Insurance does this by reimbursing people and business for covered losses, encouraging accident prevention and safety-oriented practices, providing funds for investment, enabling people to borrow money, and reducing anxiety. Even though insurance does do all these things, many people do not fully understand how insurance works or the value and security it brings to them.A strong insurance sector is of vital importance to every modern economy. It encourages the savings habit, provides safety to rural and urban enterprise and productive individuals. It generates long term investible funds for infrastructure building.India as a country is under–insured in the urban as well as the rural areas. Only 35 percent of the 250 million insurable population is insured .There exists a vast potential in the rural areas where more than 70% of our population lives. But it is common perception and belief amongst the insurance companies that it is expensive to do business in rural areas. The present Study on attitudes of rural customers throws lights on all vital issues of rural insurance, and covers opinion of insurance customers, insurance agents and business development executives selling life insurance policies. The study attempts to understand level of awareness of rural customers in order to suggest strategies for tapping untapped market. The study aimed at a thorough investigation into various issues which are the challenges in promnotion of life insurance business in rural areas.

Feudal Land Ownership Issues in the Economic History Course

2016 ◽  
Vol 2016 (1) ◽  
pp. 150-157
Author(s):  
Vladimir Pisemsky
Keyword(s):  
Economic History ◽  
Land Ownership ◽  
General Definition ◽  
Medieval Studies ◽  
Property Relations ◽  
Feudal Society ◽  
Different Types ◽  
Definition Of ◽  
Agrarian Revolution

The article examines the understanding of feudal land ownership as a fundamental institution of a feudal society. Drawing on the results of medieval studies in Russia we indicate the specific features of feudal property necessary for the retention by students. On this basis we provide the general definition of the bourgeois agrarian revolution and identify its different types. Finally, we consider the presence of classical signs of feudal property relations in agrarian Russia till 1861.

scholarly journals On Valuation and Risk Management at the Interface of Insurance and Finance

2002 ◽  
Vol 8 (4) ◽  
pp. 787-827 ◽  
Author(s):  
T. Møller
Keyword(s):  
Financial Markets ◽  
Life Insurance ◽  
Financial Risk ◽  
Insurance Risk ◽  
Indifference Pricing ◽  
Insurance Contracts ◽  
The Past ◽  
Market Shares ◽  
Quadratic Hedging ◽  
Mean Variance

ABSTRACTThis paper reviews methods for hedging and valuation of insurance claims with an inherent financial risk, with special emphasis on quadratic hedging approaches and indifference pricing principles and their applications in insurance. It thus addresses aspects of the interplay between finance and insurance, an area which has gained considerable attention during the past years, in practice as well as in theory. Products combining insurance risk and financial risk have gained considerable market shares. Special attention is paid to unit-linked life insurance contracts, and it is demonstrated how these contracts can be valued and hedged by using traditional methods as well as more recent methods from incomplete financial markets such as risk-minimisation, mean-variance hedging, super-replication and indifference pricing with mean-variance utility functions.

Ch.3 Validity, s.2: Grounds for avoidance, Art.3.2.1

2015 ◽  
Author(s):  
Huber Peter
Keyword(s):  
Burden Of Proof ◽  
General Definition ◽  
Legal Systems ◽  
Time Burden ◽  
Different Types ◽  
Definition Of ◽  
Broad Approach ◽  
Types Of Error

This commentary focuses on Article 3.2.1 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the concept of mistake. Art 3.2.1 defines mistake as an erroneous assumption relating to facts or to law existing when the contract was concluded. Based on this general definition of the concept of mistake, Art 3.2.1 does not follow those national legal systems that try to distinguish between different types of error. Instead, it takes a very broad approach to the concept of mistake. Furthermore, even errors in expression or transmission are regarded as mistakes under the PICC. This commentary discusses the purpose of Art 3.2.1, erroneous assumption relating to facts or to law, relevant time, burden of proof, and consequences of a mistake.

scholarly journals Risks of the insurance company: classification and methods of analysis

2018 ◽  
Keyword(s):  
Financial Risk ◽  
Business Processes ◽  
Risk Identification ◽  
Insurance Companies ◽  
Modern Concept ◽  
Insurance Company ◽  
Strategic Risk ◽  
Insurance Contracts ◽  
Definition Of

The purpose of the article was to develop a risk classification of the insurance company, identify the shortcomings and advantages of existing methods of risk analysis and measures to reduce the risks of insurance companies. Group presented risk assessment methods is, according to the author, rather conditional, because risk identification can be carried out using techniques and technologies analysis and evaluation of all types of risks, and vice versa. An analysis of the studies of Ukrainian and foreign authors showed that there are a large number of classification features and types of risks and the absence of a single universally accepted classification of risks, which in our opinion, the author is associated with the unsystematic conceptual apparatus of the theory of risks and a wide variety of their manifestations in the practical activities of enterprises. Therefore, the definition of "risk" is clarified and it is emphasized that the modern concept of management of operating activities in an insurance company relies on the methodology of its operating business processes: the conclusion and maintenance of insurance contracts, underwriting, reinsurance and settlement of losses. The classification of risks of the insurance company and the logical connections of groups of general and specific risks is proposed, combining them into 4 types: risk of accidental risk (accidental and dangerous events), financial risk, operational risk - probability of occurrence of losses due to incorrect work of personnel, internal systems or under the influence of external factors and strategic risk. Considered is the estimation of the efficiency of the insurance company with the use of EVA and RAROC indicators, which allow to assess the financial position of the company and its effective management, or its subdivision. Considered is the application of stress testing and individual measures to reduce financial risk for effective insurance of risks of an insurance company.

scholarly journals EFFICIENT HEDGING AND PRICING OF EQUITY-LINKED LIFE INSURANCE CONTRACTS ON SEVERAL RISKY ASSETS

2008 ◽  
Vol 11 (03) ◽  
pp. 295-323 ◽  
Author(s):  
ALEXANDER MELNIKOV ◽  
YULIYA ROMANYUK
Keyword(s):  
Life Insurance ◽  
Financial Risk ◽  
Risk Preference ◽  
Financial Assets ◽  
Insurance Risk ◽  
Risky Assets ◽  
Insurance Contracts ◽  
Maturity Date ◽  
Efficient Hedging ◽  
Probabilistic Result

The paper uses the efficient hedging methodology in order to optimally price and hedge equity-linked life insurance contracts whose payoff depends on the performance of several risky assets. In particular, we consider a policy which pays the maximum of the values of n risky assets at some maturity date T, provided that the policyholder survives to T. Such contracts incorporate financial risk, which stems from the uncertainty about future prices of the underlying financial assets, and insurance risk, which arises from the policyholder's mortality. We show how efficient hedging can be used to minimize expected losses from imperfect hedging under a particular risk preference of the hedger. We also prove a probabilistic result, which allows one to calculate analytic pricing formulas for equity-linked payoffs with n risky assets. To illustrate its use, explicit formulas are given for optimal prices and expected hedging losses for payoffs with two risky assets. Numerical examples highlighting the implications of efficient hedging for the management of financial and insurance risks of equity-linked life insurance policies are also provided.

STATE REGULATION OF THE FINANCIAL SERVICES MARKET IN UKRAINE

2018 ◽  
Vol 1 (11) ◽  
pp. 30-47
Author(s):  
Lyudmila Nikolayevna Akimova ◽  
Alla Vasilievna Lysachok
Keyword(s):  
Life Insurance ◽  
Financial Services ◽  
Credit Unions ◽  
State Regulation ◽  
The State ◽  
Existing Problems ◽  
Insurance Contracts ◽  
State Pension

The essence of such concepts is “financial service”, “financial ser- vices market”, and “participants of the financial services market”; determined the purpose of state regulation of the financial services market; forms of state regu- lation of the financial services market; financial services that are present in the financial services market; the structure of state regulation bodies of the financial services market in Ukraine is given; The role of state bodies in the regulation of the financial services market was studied; to characterize the regulatory le- gal regulation of the financial services market in Ukraine; the main problems of functioning of the domestic market of financial services are revealed; ways to solve existing problems. It is grounded that the state regulation of financial ser- vices markets consists in the state’s implementation of a set of measures aimed at regulating and overseeing financial services markets to protect the interests of financial services consumers and preventing crisis phenomena. It is concluded that the financial services market is an important element of the development of the economy as a whole, in particular, it concerns not only the state but also society. We must understand that when this market is settled, that is, all bodies that carry out state regulation are competent in their powers, only then will we make informed, effective decisions about the normal and effective functioning of the RFP. It is important that the data of the subjects of control do not overlap, their activities should be fixed at the legislative level. It is also worth bearing in mind that appropriate conditions must be created to create compensatory mecha- nisms in the financial services markets by developing a system for guarante- eing deposits and providing for payments under long-term life insurance contracts, non-state pension provisions, deposits with deposit accounts to credit unions, etс.

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