scholarly journals Financial Advice and Portfolio Diversification

2019 ◽  
Vol 8 (4) ◽  
pp. 178
Author(s):  
Augustine C. Arize ◽  
Tao Guo ◽  
John Malindretos ◽  
Lawrence Verzani
Keyword(s):  
Financial Institution ◽  
Portfolio Diversification ◽  
Insurance Companies ◽  
Financial Advice ◽  
Portfolio Decisions ◽  
Investment Portfolios ◽  
Diversified Portfolio

This paper examines whether households diversify their investment portfolios and whether portfolio diversification could be affected by where investors seek advice. We found that respondents find advice from banks, insurance companies, and brokerage houses less helpful compared to reading investment research and financial periodicals when making their portfolio decisions. Comparing among the advice from all type of financial institution or financial professionals, it is found that advice from brokerage houses is still the most helpful. But when looking at their actual portfolio diversification, those who rely on brokers’ advice ended up with a less diversified portfolio. These findings support our hypothesis that investors’ portfolio could be negatively influenced because of the services they received from brokerage houses. 

scholarly journals The impact of the global financial crisis on the structure of investment portfolios of insurance companies

2011 ◽  
Vol 56 (191) ◽  
pp. 143-161 ◽  
Author(s):  
Jelena Kocovic ◽  
Tatjana Rakonjac-Antic ◽  
Marija Jovovic
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Financial Institution ◽  
Developed Countries ◽  
Insurance Companies ◽  
Financial Health ◽  
Patterns Of Behavior ◽  
The Global Financial Crisis ◽  
Investment Portfolios ◽  
The Impact

This article deals with the impact of the global financial crisis on the scale and structure of investment portfolios of insurance companies, with respect to their difference compared to other types of financial institution, which derives from the specific nature of insurance activities. The analysis includes insurance companies? exhibited and expected patterns of behavior as investors in the period before, during, and after the crisis, considering both the markets of economically developed countries and the domestic financial market of Serbia. The direction of insurers? investments in the post-crisis period should be very carefully examined in terms of their future implications for the insurance companies? long-term financial health, and defined in a broader context of managing all risks to which they are exposed, taking into account the interdependence of these risks. Pertinent recommendations in this regard have arisen from research of relevant past experience and current trends, and also from an analysis and comparison of views on this subject presented by a number of authors.

ANALISIS RISIKO OPERASIONAL MENGGUNAKAN PENDEKATAN DISTRIBUSI KERUGIAN DENGAN METODE AGREGAT

2011 ◽  
Vol 10 (2) ◽  
pp. 1
Author(s):  
Y. ARBI ◽  
R. BUDIARTI ◽  
I G. P. PURNABA
Keyword(s):  
Negative Binomial Distribution ◽  
Binomial Distribution ◽  
Negative Binomial ◽  
Financial Institution ◽  
Expected Value ◽  
Insurance Companies ◽  
Limited Data ◽  
Loss Distribution Approach ◽  
Potential Loss ◽  
The Impact

Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes or external problems. Insurance companies as financial institution that also faced at risk. Recording of operating losses in insurance companies, were not properly conducted so that the impact on the limited data for operational losses. In this work, the data of operational loss observed from the payment of the claim. In general, the number of insurance claims can be modelled using the Poisson distribution, where the expected value of the claims is similar with variance, while the negative binomial distribution, the expected value was bound to be less than the variance.Analysis tools are used in the measurement of the potential loss is the loss distribution approach with the aggregate method. In the aggregate method, loss data grouped in a frequency distribution and severity distribution. After doing 10.000 times simulation are resulted total loss of claim value, which is total from individual claim every simulation. Then from the result was set the value of potential loss (OpVar) at a certain level confidence.

Building and maintaining investment portfolios

2021 ◽  
pp. 315-324
Author(s):  
Jesper Rangvid
Keyword(s):  
Asset Allocation ◽  
Portfolio Diversification ◽  
Economic Environment ◽  
Allocation Decision ◽  
Practical Advice ◽  
Investment Portfolios

This last chapter in the book provides research-based perspectives on a number of challenges investors face when building and maintaining investment portfolios. The paper discusses portfolio diversification, the active vs. passive debate, the asset allocation decision, i.e. what determines the fraction of a portfolio that should be invested in stocks, practical advice on how the economic environment should affect your asset allocation, and other topics.

Investment Portfolio Performances of Public Sector General Insurance Firms in India: An Empirical Approach

2017 ◽  
Vol 6 (1) ◽  
pp. 61-75
Author(s):  
Joy Chakraborty ◽  
Sankarshan Basu
Keyword(s):  
Public Sector ◽  
Multiple Linear Regression Model ◽  
Insurance Companies ◽  
The Public ◽  
Insurance Sector ◽  
General Insurance ◽  
Long Run ◽  
Insurance Firms ◽  
Investment Portfolios ◽  
The Impact

Deregulation of the Indian insurance sector has witnessed the rise of private players in the Indian general insurance sector post-1999. Though the four major public sector general insurers still continue to dominate the Indian general insurance market, an abrupt rise in the number of private players has raised concerns upon the solvency position of the public sector general insurance companies in safeguarding their policyholders’ interests. The major reason for this concern could be attributed to the existing investment portfolios of the general insurance firms, the impact of which has been felt upon their solvency position. The present study investigated the investment portfolios of the four major public sector general insurance firms in India involved in multiline businesses, and its subsequent impact upon their solvency position. The application of the multiple linear regression model has been employed to investigate the solvency determinants of the public sector general insurance firms in view of their short-term and long-term investment portfolios, covering the study period from 2005–2006 to 2014–2015. The findings of the study have pointed out the necessity for the four public sector general insurers to focus on certain key investment variables in their investment portfolios in ensuring a sound solvency position in the long run.

scholarly journals Research on internal indicators of financial stability of insurance companies in the Republic of Serbia

Skola biznisa ◽  
2020 ◽  
pp. 1-22
Author(s):  
Tatjana Stevanović ◽  
Jelena Stanković ◽  
Jovica Stanković
Keyword(s):  
Performance Measures ◽  
Financial Stability ◽  
Balance Sheet ◽  
Economic Conditions ◽  
Insurance Companies ◽  
Insurance Sector ◽  
Data Mining Algorithms ◽  
The Republic ◽  
Investment Portfolios ◽  
Mining Algorithms

Dynamic changes in the insurance sector require a new system of performance measures, which enables monitoring of multiple business segments of insurance companies and meets the information requirements of a large number of different stakeholders. In this regard, in the Republic of Serbia a multidimensional system of performance measures is used - the CARMEL framework, made according to the methodology of the International Monetary Fund. Due to the fact that these indicators indicate the effectiveness of different business segments, the analysis of the performance of insurance companies cannot be based only on one of these groups. Assessment of financial stability and ranking of insurance companies can be performed using different data mining algorithms. The obtained results show that key internal factors for the financial stability of insurance companies change under different economic conditions. During the period of the financial crisis the greatest impact on the financial stability of insurance companies had the quality of management, but also the earning capacity and profitability and liquidity of insurance companies. The classification of insurance companies according to their performance is compared with the official rankings offered by the supervisory body based on the value of the balance sheet assets and the value of premiums paid. It can be concluded that the largest insurance companies are not the most successful in all economic conditions. Inadequate capital management, as well as the inability to generate insurance and investment portfolios, has led to a drastic decrease in the profitability of these insurance companies.

PORTFOLIO DIVERSIFICATION IN THE KARACHI STOCK EXCHANGE

2015 ◽  
Vol 1 (1) ◽  
Author(s):  
Aakash Ahuja
Keyword(s):  
Stock Exchange ◽  
Financial Analysts ◽  
Portfolio Diversification ◽  
Expected Return ◽  
Minimum Number ◽  
Standard Deviations ◽  
Diversified Portfolio

Investment in stocks and expected return from such investment always comes with risk. Financial economists and financial analysts have been working for years to find ways to minimize risk. What all financial analysts believe is that creating well-diversified portfolio can minimize risk. Fama (1976), Elton & Grubber (1977), Evans & Archer (1968) and many other analysts have shown that well-diversified portfolios can actually minimize risk and have suggested the minimum number of stocks required for a well-diversified portfolio. In this paper portfolio diversification theory is applied for the investors investing in the Karachi Stock Exchange. Fifteen (15) securities were randomly selected and equally weighted portfolios were created. Standard Deviations for all portfolios were calculated and the results were analyzed. The study concluded that a portfolio of 10 stocks can diversify away significant amount of risk.

scholarly journals Individual Investors and Portfolio Diversification in Late Victorian Britain: How Diversified Were Victorian Financial Portfolios?

2018 ◽  
Vol 78 (2) ◽  
pp. 435-471 ◽  
Author(s):  
Dimitris P. Sotiropoulos ◽  
Janette Rutterford
Keyword(s):  
Nineteenth Century ◽  
Risk Reduction ◽  
Portfolio Diversification ◽  
Individual Investors ◽  
England And Wales ◽  
Financial Advice ◽  
Victorian Britain ◽  
Portfolio Strategies ◽  
Financial Portfolios ◽  
Financial Securities

This article investigates Victorian investor financial portfolio strategies in England and Wales during the second half of the nineteenth century. We find that investors held on average about half of their gross wealth in the form of four or five liquid financial securities, but were reluctant to adopt fully contemporary financial advice to invest equal amounts in securities or to spread risk across the globe. They generally held under-diversified portfolios and proximity to their investments may have been an alternative to diversification as a means of risk reduction, especially for the less wealthy.

ERM for insurance companies – adding the investor's point of view

2011 ◽  
Vol 16 (2) ◽  
pp. 341-384 ◽  
Author(s):  
A. N. Hitchcox ◽  
P. J. M. Klumpes ◽  
K. W. McGaughey ◽  
A. D. Smith ◽  
N. H. Taverner
Keyword(s):  
Point Of View ◽  
Insurance Companies ◽  
Sufficient Information ◽  
Insurance Company ◽  
Model Risk ◽  
Franchise Value ◽  
New Business ◽  
Total Investment ◽  
Investment Portfolios ◽  
Risk Potential

AbstractA major outcome of ERM activities in insurance companies has been the bringing together of all of the key risks in the company, to be managed collectively in a holistic fashion. The authors of this paper believe that an ERM framework also needs to look beyond the company, and have regard to the risk management needs of investors, from the point of view of the contribution of the insurance company to the overall risk and reward of their total investment portfolios. To meet these needs, the ERM framework needs to provide sufficient information on topics such as systematic risk, potential correlations of earnings from future new business with macroeconomic trends, other risks to franchise value, and sources of model risk within the company. The paper does not provide solutions for the issues described above; but limits itself to describing and discussing the direction for some important new initiatives in ERM activities.

scholarly journals Alternative Investments: Valuation of Wine as a Means for Portfolio Diversification

2015 ◽  
Vol 16 (1) ◽  
pp. 84-93 ◽  
Author(s):  
Daiva Jurevičienė ◽  
Agnė Jakavonytė
Keyword(s):  
Data Analysis ◽  
Financial Crises ◽  
Statistical Data ◽  
Portfolio Diversification ◽  
Risk Level ◽  
Statistical Data Analysis ◽  
Investment Portfolio ◽  
Advantages And Disadvantages ◽  
Investment Tool ◽  
Investment Portfolios

This article analyses wine as an alternative investment tool and its relevance for investment portfolio diversification. Advantages and disadvantages of alternatives, benefits and weakness and peculiarities of investing in wine are systemised. In addition, the article looks at statistical data analysis of fine wine market and compares wine with other investment tools. The examination is based on three investment instruments: US equities (using SandP 500 index), bonds (using US 20-Year treasury constant maturity rate/DGS20) and wine (based on Fine Wine Investable index) using 1993–2012 (end of year) data. The investment portfolios made with two and three above-mentioned investment tools basing on H. Markowitz’s investment portfolio theory and effective curves are presented. It was found that return on investments only from equities and bonds or wine and one of these traditional instruments are signally less than from the investment mix of all three tools. Furthermore, portfolios made only from equities and bonds provide the lowest return compared to others. Choosing from two investments portfolios, results of bond/wine portfolios propose higher return with the same risk level compared to equities/wine portfolio. Consequently, despite some slowdown of wine index during financial crises, wine relevance for portfolio diversification in post crises period was proved.

scholarly journals International Real Estate Review

1998 ◽  
Vol 1 (1) ◽  
pp. 17-44
Author(s):  
Gregory H. Chun ◽  
Keyword(s):  
Real Estate ◽  
Life Insurance ◽  
Institutional Investors ◽  
Empirical Work ◽  
The United States ◽  
Insurance Companies ◽  
Portfolio Decisions ◽  
The United Kingdom ◽  
Real Estate Assets ◽  
Ownership Patterns

In this paper we examine the institutional real estate ownership patterns of life insurance companies for 10 countries over the period 1986-96. The countries included are ustralia, Austria, Belgium, France, Italy, the Netherlands, Spain, Sweden, the United Kingdom, and the United States. We find that most institutional investors worldwide have shifted out of real estate assets and into stocks and bonds over the last decade. We then investigate whether this behavior is the result of changing investor perceptions or a shift in stock market apitalization. To test this hypothesis, the paper derives measures of ex ante real estate returns following previous empirical work in finance. The results indicate that only a small proportion of what is driving institutional investors' real estate portfolio decisions is actually explained by changing investor perceptions and lagged unexpected excess returns.

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