Risk Management in International Corporations

Abstract

private pension plans have accumulated assets and reserves, and are a major source of funds for the capital markets of the country. This reviewer's greatest disappointment in reading this book came from the last chapter on future growth prospects. For a book that is inundated with statistics, numerical forecasts were expected. Bishop expects little change in either the mix of insurance products sold or investments made. His predictions or rather extrapolations are generally in line with past experience. Rather than discussing the role that the life insurance industry will play in the future formation of capital, the author is content with discussing recent patterns or trends of products sold and investments made by life insurance companies. Given the assumption of moderate inflation, Bishop expects the trend to continue from endowment and whole life policies to term policies. Funds from group life insurance should continue to grow with the current dollar level of wages and salaries. Funds provided from pension plans should be fairly stable and immune to varying rates of inflation. With respect to industry investments, Bishop expects that life companies should maintain or slightly increase their percentage share in corporate debt investments. Privately placed debt should maintain its relative degree of importance. With respect to mortgage investments the author feels that the industry is capable of maintaining its position. Bishop meticulously describes the movements in life insurance products and investments from 1950 to 1974. Plausible explanations or factors are presented to account for these movements. The book, however, lacks an elaborate theoretical foundation for explaining why certain products or investments have increased or decreased in popularity. Also, little or no attempt is made to rank/order the factors that have caused particular products or investments to move. Nevertheless, for those who are interested in an introductory discussion of capital formation through life insurance, this book should be a valuable reference source.