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Author: Sojung Park Publisher: ISBN: Category : Languages : en Pages : 39
Book Description
This article investigates market discipline in the reinsurance market by examining the sensitivity of reinsurance demand to reinsurer counterparty risk for a sample of US property-liability insurance companies. Using the financial strength rating of reinsurers as a proxy for reinsurance counterparty risk, we find evidence of market discipline that reinsurance demand is sensitive to counterparty risk. Specifically, reinsurance demand reacts negatively to reinsurer rating downgrades, with the reduction being the largest when a “weak” reinsurer gets “weaker,” followed by a reinsurer being downgraded below a benchmark rating. The sensitivity is higher for authorized reinsurance than for unauthorized reinsurance. Reinsurance demand sensitivity to counterparty risk is found to be lower for ceding insurers with higher leverage. Ceding insurers with high reinsurer sustainability are less sensitive to non-critical rating downgrades of reinsurers. Additionally, reinsurance demand is found to be less sensitive to reinsurer upgrading than to reinsurer downgrading.
Author: Sojung Park Publisher: ISBN: Category : Languages : en Pages : 39
Book Description
This article investigates market discipline in the reinsurance market by examining the sensitivity of reinsurance demand to reinsurer counterparty risk for a sample of US property-liability insurance companies. Using the financial strength rating of reinsurers as a proxy for reinsurance counterparty risk, we find evidence of market discipline that reinsurance demand is sensitive to counterparty risk. Specifically, reinsurance demand reacts negatively to reinsurer rating downgrades, with the reduction being the largest when a “weak” reinsurer gets “weaker,” followed by a reinsurer being downgraded below a benchmark rating. The sensitivity is higher for authorized reinsurance than for unauthorized reinsurance. Reinsurance demand sensitivity to counterparty risk is found to be lower for ceding insurers with higher leverage. Ceding insurers with high reinsurer sustainability are less sensitive to non-critical rating downgrades of reinsurers. Additionally, reinsurance demand is found to be less sensitive to reinsurer upgrading than to reinsurer downgrading.
Author: Georges Dionne Publisher: Springer Science & Business Media ISBN: 1461401550 Category : Business & Economics Languages : en Pages : 1133
Book Description
This new edition of the Handbook of Insurance reviews the last forty years of research developments in insurance and its related fields. A single reference source for professors, researchers, graduate students, regulators, consultants and practitioners, the book starts with the history and foundations of risk and insurance theory, followed by a review of prevention and precaution, asymmetric information, risk management, insurance pricing, new financial innovations, reinsurance, corporate governance, capital allocation, securitization, systemic risk, insurance regulation, the industrial organization of insurance markets and other insurance market applications. It ends with health insurance, longevity risk, long-term care insurance, life insurance financial products and social insurance. This second version of the Handbook contains 15 new chapters. Each of the 37 chapters has been written by leading authorities in risk and insurance research, all contributions have been peer reviewed, and each chapter can be read independently of the others.
Author: OECD Publisher: OECD Publishing ISBN: 9264803076 Category : Languages : en Pages : 138
Book Description
This report explores each of these conditions along with policy suggestions for fostering them, and discusses the development of multi-country CAT bonds in Asia and the Pacific.
Author: Tobias Götze Publisher: Cuvillier Verlag ISBN: 3736963785 Category : Business & Economics Languages : en Pages : 194
Book Description
Due to the increasing relevance of natural catastrophes as a significant global source of risk and the capacity constraints in primary insurance and reinsurance markets, CAT bonds have become an important instrument to manage catastrophe risks by transferring them to the capital market. In three empirical studies, this dissertation examines the challenges related to catastrophe risk management with CAT bonds. First, the factors that influence the substitution of traditional reinsurance by CAT bonds are identified. These factors consist of the insured risk layer and the extends of reinsurer default risk, basis risk, and asymmetric information. Second, the accessibility of the CAT bond market for (re)insurance companies is analyzed and the results exhibit the existence of barriers to market entry in the form of higher premiums being paid by less reputable and financially weaker CAT bond sponsors. The third empirical study shows that CAT bond sponsors are susceptible to moral hazard, but also that moral hazard can be successfully prevented by sufficient loss retention or by the use of non-indemnity CAT bonds. Altogether, this dissertation contributes to improving the understanding of the CAT bond market and the challenges of catastrophe risk management using CAT bonds.
Author: Kenneth A. Froot Publisher: University of Chicago Press ISBN: 0226266257 Category : Business & Economics Languages : en Pages : 490
Book Description
Is it possible that the insurance and reinsurance industries cannot handle a major catastrophe? Ten years ago, the notion that the overall cost of a single catastrophic event might exceed $10 billion was unthinkable. With ever increasing property-casualty risks and unabated growth in hazard-prone areas, insurers and reinsurers now envision the possibility of disaster losses of $50 to $100 billion in the United States. Against this backdrop, the capitalization of the insurance and reinsurance industries has become a crucial concern. While it remains unlikely that a single event might entirely bankrupt these industries, a big catastrophe could place firms under severe stress, jeopardizing both policy holders and investors and causing profound ripple effects throughout the U.S. economy. The Financing of Catastrophe Risk assembles an impressive roster of experts from academia and industry to explore the disturbing yet realistic assumption that a large catastrophic event is inevitable. The essays offer tangible means of both reassessing and raising the level of preparedness throughout the insurance and reinsurance industries.
Author: Nigel Davies Publisher: International Monetary Fund ISBN: 1451856008 Category : Business & Economics Languages : en Pages : 45
Book Description
This paper explores insurance as a source of financial system vulnerability. It provides a brief overview of the insurance industry and reviews the risks it faces, as well as several recent failures of insurance companies that had systemic implications. Assimilation of banking-type activities by life insurers appears to be the key systemic vulnerability. Building on this experience and the experience gained under the FSAP, the paper proposes key indicators that should be compiled and used for surveillance of financial soundness of insurance companies and the insurance sector as a whole.
Author: Mr.Andreas A. Jobst Publisher: International Monetary Fund ISBN: 149832455X Category : Business & Economics Languages : en Pages : 84
Book Description
Over the last decade, stress testing has become a central aspect of the Fund’s bilateral and multilateral surveillance work. Recently, more emphasis has also been placed on the role of insurance for financial stability analysis. This paper reviews the current state of system-wide solvency stress tests for insurance based on a comparative review of national practices and the experiences from Fund’s FSAP program with the aim of providing practical guidelines for the coherent and consistent implementation of such exercises. The paper also offers recommendations on improving the current insurance stress testing approaches and presentation of results.
Author: David M. Dror Publisher: World Bank Publications ISBN: 9780821350416 Category : Business & Economics Languages : en Pages : 548
Book Description
Annotation This volume views community-based microinsurance as an incremental first step to improved financial protection and better access to health services for the poor. While community-based financing can be structured in various ways, this volume focuses on reinsurance as a mechanism for improving micro-level health insurance units. It outlines strategies and policies that can be applied by countries and donors to improve access to health care services.
Author: Marcelo Cruz Publisher: ISBN: 9781906348199 Category : Hedging (Finance) Languages : en Pages : 614
Book Description
The Solvency II Handbook brings together some of the best known and most renowned experts in insurance risk management to provide a detailed examination of the main requirements and impacts of Solvency II to insurers and reinsurers.
Author: Sojung Park
Author: Sojung Park
Author: Georges Dionne
Author: OECD
Author: Tobias Götze
Author: Kenneth A. Froot
Author: Nigel Davies
Author: Mr.Andreas A. Jobst
Author: Harry H. Panjer
Author: David M. Dror
Author: Marcelo Cruz