Securing Bank Claims by means of Credit Risk Insurance versus Insurance Recourse

2019 ◽  
Vol 3 (100) ◽  
pp. 47-61
Author(s):  
Dawid Rogoziński
Keyword(s):  
Credit Risk ◽  
Insurance Premium ◽  
Specific Nature ◽  
Dynamic Development ◽  
Insurance Cost ◽  
Risk Insurance ◽  
Credit Institutions ◽  
Banking Operations

This article examines the specific nature of the insurance of risks directly related to lending. The dynamic development of cooperation between banking and insurance industries has resulted not only in a greater popularity of the coverages already existing on the market, but also in new types of insurance products directly linked to banking operations and covering risks that were traditionally non-transferable to insurance undertakings. Further comments refer to the functions of insurance recourse in relations with banks. However, the main focus of this study is the confrontation of results of those analyses with the phenomenon of directing recourse claims to the entities carrying the actual and final burden of the insurance cost (borrowers). Moreover, practical solutions adopted by credit institutions which involve the treatment of credit risk insurances as payment protection methods and consequently shift the burden of insurance premium onto the borrower have been assessed.

Climate change and fl ood insurance in Germany, Great Britain and Serbia

2021 ◽  
Author(s):  
Slobodan Jovanovic ◽  
Keyword(s):  
Climate Change ◽  
Great Britain ◽  
Insurance Premium ◽  
Point Of View ◽  
Prevention Measures ◽  
Natural Risk ◽  
The United Kingdom ◽  
Risk Insurance ◽  
The Impact ◽  
High Winds

In this paper, the author analyzes the organization of fl ood risk insurance, the risk which signifi cantly deteriorates due to climate change in Germany, the United Kingdom and Serbia. Th e author used selected studies and works, national legislation, insurance conditions and materials of specialized organizations. Climate change signifi cantly aff ects the frequency and severity of the harmful consequences of fl ood risks, which, due to their catastrophic consequences and territorial exposure, require more effi cient prevention measures and the design of their insurance. Floods are increasingly occurring as a result of heavy rainfall and high winds that simultaneously enhance their harmful potential. Th erefore, insurers cannot ignore the impact of climate change on the conditions for taking risks, determining the insurance premium, excesses and all other aspects related to these risks. From the point of view of risk assessment and selection techniques, the principle of fl ood insurability will certainly be applied in the future. Th erefore, refraining insurers from insuring those risks where the recurrence of fl oods is more frequent than a certain number of years (fi ve or ten years), based on the historical development of claims or classifi cation of zones into the danger class with increased frequency, will certainly pose a problem for policyholders. In Germany, fl ood risk cover is provided similarly to a number of Serbian insurers, ie. as an additional risk to basic property risks. However, the German insurance practice provides an opportunity to insure a number of other natural risks as a supplementary risk in the form of a natural risk package. It should be pointed out that there are also insurers in Serbia, whose policy terms regarding the cover scope more or less coincide with the insurance of named risks in Great Britain. Th ese are insurance conditions that represent an extension of the so-called traditional insurance of named fi re risks, which certainly represents a good step in the direction of modernizing the household insurance conditions in Serbia.

Credit risk and the deposit insurance premium: a note

2001 ◽  
Vol 53 (5) ◽  
pp. 497-508 ◽  
Author(s):  
Jean Dermine ◽  
Fatma Lajeri
Keyword(s):  
Credit Risk ◽  
Deposit Insurance ◽  
Insurance Premium

scholarly journals Insurance as a loan agreement for managing risk in corporate lending

2021 ◽  
Vol 9 (1) ◽  
pp. 84-93
Author(s):  
Marija Đekić ◽  
Vladimir Ristanović
Keyword(s):  
Risk Management ◽  
Developing Countries ◽  
Credit Risk ◽  
Significant Role ◽  
Credit Risk Management ◽  
Methods And Techniques ◽  
The Subject ◽  
Managing Risk ◽  
Banking Operations

Credit risk management is one of the most important banking operations, both in developed and developing countries. In addition to numerous methods and techniques, banks decide to conclude special credit agreements when granting loans to economic entities. The special provisions of such an agreement provide additional assurance to the lender that it will not incur losses when borrowing funds. In these loan agreements, insurance plays a significant role, whether it is corporate or bank borrowing. In this paper, the subject of consideration is the role of insurance as a loan agreement in corporate lending primarily by banks. The aim of this paper is to describe the importance and role of insurance in the process of corporate lending, point out the benefits of the existence of provisions related to insurance in the loan agreement for both lender and borrower, and provide a brief overview of the use of insurance as a method of credit risk management, referring to the use of this type of agreement in Serbia as well.

scholarly journals Theoretical Framework for Research on the Factors Affecting the Moral Hazard in Banking Operation

2021 ◽  
Vol 4 (3) ◽  
Author(s):  
Ngo Thanh Xuan ◽  
◽  
Do Hoai Linh ◽  
Khuc The Anh ◽  
Nguyen Khoa Duc Anh
Keyword(s):  
Moral Hazard ◽  
Credit Risk ◽  
Banking System ◽  
Operational Risk ◽  
Theoretical Framework ◽  
Ethical Conduct ◽  
Factors Affecting ◽  
Banking Operations

There are many types of risks related to banking operations such as credit risk, interest risk, operational risk. Problems related to moral hazard have led to considerable setbacks for the economy in general and banking system in particular. Besides, moral hazard is an economic and financial terminology and is used to denote the risk generated from the deterioration in ethical conduct. Hence, authors aim at reviewing theoretical framework for determinants impacting moral hazard in banks.

scholarly journals Banking operations development in the context of stable interbank competition

2020 ◽  
Vol 208 ◽  
pp. 03002
Author(s):  
Gulmira Nasyrova ◽  
Larisa Yuzvovich ◽  
Elena Knyazeva ◽  
Natalia Isakova
Keyword(s):  
Service Provision ◽  
Banking Sector ◽  
Consumer Preferences ◽  
New Products ◽  
Government Support ◽  
Loyalty Programs ◽  
Economic Relations ◽  
The Subject ◽  
Credit Institutions ◽  
Banking Operations

A stable banking sector is important for any economy due to its colossal impact on both economic processes in the country and the life of society as a whole. Among the significant trends in the development of the banking sector for 2020, experts highlighted a significant reduction in the number of banks, an increase in the concentration of assets in the sector, the acquisition of IT companies by large banks and a reduction in the time spent on developing and launching new products, the development of biometrics and gamification of loyalty programs, strengthening of positions the largest credit institutions and an increase in the share of banks with government support. Let us emphasize that modern banks are entering the field of competition with large technological and financial-technological corporations. They are forced to increase the availability, mobility, convenience and speed of service provision, to optimize costs by transforming the branch network, developing remote channels and analytics in terms of consumer preferences, which allows them to offer customers the most customized set of services. The subject of the research is the economic relations arising in the process of organizing banking operations in the context of interbank competition.

Opinion in War-Risk Insurance Premium Claim

1924 ◽  
Vol 18 (3) ◽  
pp. 611-613
Author(s):  
Edwin B. Parker ◽  
Chandler P . Anderson ◽  
W. Kiesselbach
Keyword(s):  
Insurance Premium ◽  
Risk Insurance

Banking Reform: New Development in Banking Legislation in 2017

Auditor ◽  
2017 ◽  
Vol 3 (11) ◽  
pp. 43-48
Author(s):  
В. Ермаков ◽  
V. Ermakov
Keyword(s):  
Banking Reform ◽  
Tier System ◽  
New Development ◽  
The Creation ◽  
Legislative Changes ◽  
Credit Institutions ◽  
Banking Operations

Th is article is devoted to legislative changes in the activities of Russian credit institutions that come into eff ect in 2018. Th ese changes in legislation lead to the creation of a two-tier system of credit institutions with signifi cant diff erences in the possibilities for conducting banking operations and other transactions.

scholarly journals Willingness to pay for Rainfall based Insurance by Smallholder Farmers in Central Rift Valley of Ethiopia: The Case of Dugda and Mieso Woredas

2014 ◽  
Vol 1 (2) ◽  
pp. 117-152
Author(s):  
Hiwot Teshome Abebe ◽  
Ayalneh Bogale
Keyword(s):  
Willingness To Pay ◽  
Smallholder Farmers ◽  
Household Head ◽  
Insurance Premium ◽  
Tobit Model ◽  
Farm Income ◽  
The Mean ◽  
Income Variability ◽  
Risk Insurance ◽  
Small Holder

Current climate variability is already imposing significant challenge to Ethiopia. Therefore,  farmers  have  faced  income  variability  in  almost  every  production  season. Problems associated with dependence on rain fed agriculture are common in Ethiopia. Smallholder farmers’ vulnerability from such income variability is also common. Over the years, a range of risk management strategies have been used to reduce, or to assist farmers to absorb, some of these risks. Since insurance is potentially an important instrument to transfer part of the risk, this study try to describe the nature of weather related risks faced by smallholder farmers, assess small holder farmers willingness to pay for the rainfall risk insurance and examine factors that affect the maximum farmers are willing to pay for the rainfall risk insurance. The data was collected from 161 sample households from the two woredas of the study area using closed ended value elicitation format followed by open ended follow up questions. The study uses Logit model to estimate the mean willingness to pay in the close ended format in addition with Tobit model to examine factors that affecting small holder farmer willingness to pay as well as intensity of payment. The mean willingness to pay values are found to be 129.98 and 183.41 birr per hectare for the open and close ended formats respectively. The total willingness to pay for the study area was found to be birr 5,740,244 per year. The tobit model shows six potential explanatory variables affect the willingness to pay value. Income of household and ownership of radio have positive and significant effect on the value of willingness to pay, whereas off-farm income, age of household head, number of livestock owning and availability of public and private gifts have negative and significant effect on willingness to pay value. If the rainfall risk insurance premium is affordable and households have enough information about the service they are willing to pay for the service. Eventually policy makers need to be aware that socio-economic and institutional characteristics of households influence the willingness to pay for rainfall risk insurance services.

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