Reinsurance and Solvency Capital: Mitigating Insurance Companies’ Ruin Probability

ABSTRACT Context: insurance companies are important to society, since they guarantee financial protection to individuals from property losses, in addition to fostering the capital market through the allocation of guarantee assets. Thus, it is essential to evaluate the instruments that guarantee their long-term financial solvency. Among them are the adoption of reinsurance treaties, the sizing of the solvency capital, and the actuarial modeling of risk processes, which allow the measurement of the ruin probability. Objective: estimate the ruin probability in risk processes with the adoption of reinsurance contracts (quota share and excess of loss), compared to scenarios without such treaties. Methods: the Cramér-Lundberg process was simulated using the Monte Carlo method, adjusting several probabilistic distributions to the severity of the compound Poisson process, which is calibrated with a set of 3,917,863 real microdata, from 30 insurance lines of business. Results: it was found that, although each branch presents particularities in the claim severity, the correct choice of reinsurance (proportional or not) implies the reduction of the ruin probability for a fixed solvency capital. Conclusion: the appropriate choice of the reinsurance contract, especially when there is evidence of high kurtosis in the claim values, intensifies the exponential decline in the relationship between the solvency capital and the ruin probability.

Resseguro e Capital de Solvência: Atenuantes da Probabilidade de Ruína de Seguradoras

ABSTRACT Context: insurance companies are important to society, since they guarantee financial protection to individuals from property losses, in addition to fostering the capital market through the allocation of guarantee assets. Thus, it is essential to evaluate the instruments that guarantee their long-term financial solvency. Among them are the adoption of reinsurance treaties, the sizing of the solvency capital, and the actuarial modeling of risk processes, which allow the measurement of the ruin probability. Objective: estimate the ruin probability in risk processes with the adoption of reinsurance contracts (quota share and excess of loss), compared to scenarios without such treaties. Methods: the Cramér-Lundberg process was simulated using the Monte Carlo method, adjusting several probabilistic distributions to the severity of the compound Poisson process, which is calibrated with a set of 3,917,863 real microdata, from 30 insurance lines of business. Results: it was found that, although each branch presents particularities in the claim severity, the correct choice of reinsurance (proportional or not) implies the reduction of the ruin probability for a fixed solvency capital. Conclusion: the appropriate choice of the reinsurance contract, especially when there is evidence of high kurtosis in the claim values, intensifies the exponential decline in the relationship between the solvency capital and the ruin probability.

The challenges of presenting traditional music in gastronomic establishments – the case of Slovenian Istria

Purpose Through investigation and comparisons between tourists and restaurant managers regarding their understanding of traditional music and their attitudes, expectations and assigned importance to it, this paper aims to identify the most problematic aspects of the (non)inclusion of traditional music in restaurant settings in tourist destinations. Design/methodology/approach Data were collected through a field survey of tourists and managers/owners of catering establishments in the four municipalities of Slovenian Istria. Findings The results show that tourists attach a relatively high importance to this element of cultural heritage and that it is not sufficiently included in the overall product of the destination and in the catering establishments. Differences in the understanding of traditional music between the two groups were also found. Research limitations/implications The research limitations are, namely, a relatively small sample of managers for the quantitative analysis, the particular nature of the chosen destination which does not allow generalization of the results and finally, the study was conducted in the high season when the structure of tourists is significantly different compared to that in the mid and low season. Practical implications The findings bring some useful insights into tourists’ expectations and understanding of traditional music as part of the tourism experience for catering establishments’ managers and destination management organizations. By addressing the identified gaps, they can enrich the overall tourism product of the destination, while catering operators can achieve better business results. Social implications The more frequent and cogent inclusion of traditional music in the hospitality sector would provide a new social function and raison d'être for this segment of cultural heritage, which is in danger of being forgotten in many tourist destinations. Originality/value This research addresses a widely overlooked area of two interrelated fields of research, namely, hospitality and cultural heritage. Unlike the majority of previous research on this topic, which only involves actual guests, the present research is designed as a comprehensive investigation and comparison of the attitudes of the general population of actual tourists in the destination (as potential guests of the inns/restaurants) and managers of catering businesses operating in the destination.

Peningkatan Kemampuan Pembukuan Pada Ukm Bakmi Pak Gembong

One of the characteristics of small industries is that they still face many obstacles, both in terms of production and business management. The production aspect includes technology/equipment, production continuity, quality uniformity, packing, labeling, etc., while in the business management aspect there is not much support for promotions, marketing development strategies, and limited distribution and bookkeeping of business results. The same thing happened to Bakmi Pak Gembong who was in Rejosari Village, East Semarang District. Where Pak Gembong's Bakmi Business is still a small-scale industry that also has problems in terms of management, especially in terms of recording the results of its business. To overcome these problems, Community Service activities were carried out by providing counseling about the importance of recording all matters relating to the operation of a business. The expected outcome of this Community Service activity is that SME actors have an understanding of the importance of recording their business on a regular basis and the benefits derived from recording business operations on a regular basis.

Layout optimization methods and tools: A systematic literature review

Purpose: This article aims to show the methods used to optimize layout and tools that have been applied since 2010 in the most diverse production environments. Theoretical Reference: Due to the intense competitiveness and uncertainties in the current market, improving processes and increasing production efficiency by managing the layout of a facility can be one of the methods to benefit organizations. In this context, knowledge of the main tools and methods is essential in defining the conduct of studies. Design/methodology/approach: Research was carried out through a systematic literature review. The databases used were Science Direct and Portal Capes. Using keywords, a defined scope and the relevance of the theme, international articles were selected for reading and discussion. Findings: Through the review, it was possible to select 51 articles which were relevant to the topic. Due to the complexity of the layout management study, it was found that increasingly more algorithms, mathematical and computational models are being used to solve these NP-hardness problems. Research, Practical & Social implications: adjusting to new methods and ways of solving problems laying out facilities, although scenarios can be extremely varied, they can improve business results by making the process more efficient. Originality/value: The article compiles and briefly explains the methods found to optimize the layout, which is of great importance considering the knowledge that these models spread on production management practices. Keywords: Layout optimization. Algorithm. Method. Facility layout planning

The influence of formal and informal control on market and financial results

Purpose This paper aims to examine the relationship between control mechanisms and marketing performance based on a sample of marketing managers. To that end, this paper focuses on the relationship between the types of controls used in marketing and the market and business results. Methodology This study collected the data through a survey among marketing professionals with experience and decision-making capacity involving marketing budgets and plans, in practical terms a sample of 97 marketing managers and analyzed the data via a structural equation model using Smart PLS 3. Findings The findings confirm that marketing control mechanisms have a significant impact on business results, demonstrating the relationship of formal controls with market results and the relationship between informal controls with financial results. Likewise, the authors were able to prove that there is a relationship between formal and informal control. Practical implications The implementation of the control mechanisms should be based on the development of a detailed evaluation system of the activities carried out by the marketing employees and an analysis of their capabilities and abilities. In addition, managers should integrate formal control decisions into their marketing strategy to improve organizational results. Originality The results of this study help explain the relationship between marketing control mechanisms and organizational results and allow to understand what the level of influence is that marketing control mechanisms have on market and financial results.

ENHANCING GOODWILL POTENTIAL WITH BRAND MANAGEMENT TOOLS

The emergence of goodwill in the process of doing business is due to the nature of the interaction of enterprise resources with environmental factors. On the basis of research, it is proved that with a competent correlation of approaches to managing the elements of the macro- and microenvironment of the enterprise, understanding the specific features of creating goodwill taking into account the scope of activity, the enterprise will receive a number of advantages. Firstly, it is the creation of additional value of the company, secondly - the possibility of obtaining excess profits (that is, profits exceeding the industry average) and, thirdly, it is the creation of favorable prospects and prerequisites for business development. The analysis of the most popular formulations of the concept of “goodwill” used in Russian and foreign practice is carried out. According to its results, it is concluded that this term is equated with the concept of "business reputation". The article presents an attempt to streamline the understanding of key aspects of brand management within the framework of the studied models of reputation management. From the review of modern and most relevant models of assessment of the company's reputation, the relationship of the main criteria for assessing the company's reputation with business results is shown. A logical chain of goodwill potential formation has been built, based on the management of emotional involvement of customers. Based on the results of the research, within the framework of the focus groups, a criterion for assessing emotional involvement - “emotional comfort” - was proposed and evaluation coefficients characterizing the level of emotional comfort of customers were developed. The actual metrics of brand management assessment are revealed, allowing to diagnose the influence of the brand on the development of goodwill potential within the framework of the proposed complex model of the influence of brand management tools on the growth of goodwill potential.

E-Commerce Apps – Solutions for Farm-Household in the Context of the Covid-19 Pandemic: Research on Suppliers of Lychee Products According to Global Gap Standards

In the context of the outbreak of the Covid-19 pandemic in countries around the world, it is extremely hard for farmers to consume agricultural products, thereby affecting their production results. This study was designed to analyze the factors affecting the production and business results of lychee farmers in Vietnam in the context of the influence of the Covid 19 pandemic. Data for the study was collected from a survey of about 400 lychee production households according to Global Gap standards in Vietnam. Research findings have shown that the revenue from the supply of lychee products of farmers in Vietnam has decreased after the effects of Covid 19. Along with that, factors also have different degrees of influence on the business results of lychee-producing households. Especially in the context of the Covid 19 pandemic, e-commerce has become an effective consumption channel, supporting the consumption of products of lychee producers in Vietnam. In the light of those findings, the author provided recommendations for lychee product suppliers in Vietnam on how to solve their problems.

The (Positive) Design Environment as a Prerequisite of Design Orientation

Design is a human-centered activity. Every design project starts with the analysis of user needs and preferences. This means that design orientation of a company should also be positively related to company’s business results. However, in most transitional countries of Central and Eastern Europe (CEECs), design environment is not supported, there is no clear national design policy, design implementation in companies varies, and there is no constant measurement of design impact. The main interest of this paper is to research the level of design implementation in Croatian companies related to the managerial approach and business results, because such research is usually undertaken in more developed countries. The study focuses on the perception of management. This quantitative research has been carried out using an Internet survey to examine managers and CEOs from Croatian companies in different industries. The results show positive relations between design environment and design orientation of a company and a significant impact of management.