Insurance Mechanism Research Articles

Modelling the growth and cyclical effects of international remittances in Fiji

ABSTRACT We model the trend/permanent and cyclical associations between international remittances and GDP using annual data from Fiji from 1979 to 2020. An extended co-feature methodology which incorporates asymmetric effects in the cyclical models is used. The findings indicate a significant and positive association between the permanent components of remittances and GDP. The cyclical associations suggest that an increase in remittances is negatively associated with negative GDP shocks in recessions providing some support for its function as an insurance mechanism. Positive shocks to remittances are not associated with positive GDP shocks suggesting that remittances may not contribute to an overheating economy. The findings stress the importance of cyclicality in the association between remittances and GDP. Policymakers benefit with information on how remittances influence economic activity in different phases of the business cycle.

Ad Hoc Adaptations to Climate Change in Coastal Communities

Climate change disproportionately impacts coastal residents in the United States. Existing studies document institutional efforts to adapt to sea level rise through projects like seawalls, beach nourishment, and property acquisitions to protect communities from rising seas. Such studies capture institutional adaptations, but do not include ad hoc adaptations by homeowners impacted by climate change. How are homeowners adapting to climate hazards? This paper analyzes ethnographic and interview data from 100 households in two coastal counties in North Carolina, a state with one of the most climate vulnerable shorelines in the country. This analysis of homeowner response considers ad hoc adaptations along the North Carolina coast. Results show that homeowners recognize climate hazards and regularly adapt on their own within the context of institutionally maintained flood protection infrastructure and transportation access to the places where they live. Residents are aware of and attempt to access support for home adaptations when programs or funds are available to them after disasters and do so with varying levels of success, though the more pervasive adaptations to chronic stress are not supported by government programs or insurance mechanisms. Ad hoc adaptations may provide short-term protection from climate hazards but have questionable long-term efficacy as sea levels rise and storm strength and frequency increases. Leaving communities and households to adapt on their own as chronic climate hazards outpace institutional response exacerbates existing inequalities by relying on residents with different levels of resources and agency to adapt.

Prospective impacts of windstorm risk on carbon sinks and the forestry sector: an integrated assessment with Monte Carlo simulations

Abstract Storms pose a significant threat to economic activities in the forest sector and introduce non-permanence risks for carbon stocks. Following escalating climate ambitions, understanding and addressing these risks becomes imperative. Uncertainties intrinsic to the storm phenomenon render this task complex. This study uses an integrated forest sector model to assess the economic and carbon impacts of storm regimes, emphasizing the importance of uncertainties through Monte Carlo simulation. From an economic perspective, we unravel complex interplays between the salvage and inventory effects of storms that lead to heterogeneous transfers of economic welfare across agents and space. Non-affected forest owners benefit from inflated prices, while affected owners’ recovery hinges on the magnitude of storm damage. From a climate perspective, storms significantly impact the forest sector’s carbon sink, with a high risk of falling short on mitigation objectives. In 25% of simulations, we observe a substantial 24% decrease in carbon sequestration. Our findings advocate for (1) conservative reliance on natural carbon sinks in national climate mitigation strategies toward net-zero, and (2) tailored risk-sharing insurance mechanisms for forest owners, providing a buffer against economic uncertainties arising from climatic disruptions.

Design of a Socially Inclusive Climate Risk Transfer Mechanism: A Case Study in La Guajira, Colombia

The primary aim of this study was to develop a model of a socially inclusive climate risk insurance (CRI) mechanism based on the differential risk transfer approach. This study focused on the department of La Guajira, Colombia, as a case study. La Guajira is the department in Colombia that, due to its critical disaster risk conditions, presents the adequate configuration for implementing a climate risk transfer mechanism. The article starts by analyzing risk conditions by using secondary data. Based on fieldwork, this research explored the perspectives of the most vulnerable sectors in La Guajira Department on the socioeconomic impacts and needs they experience regarding climate-related hazards, their adaptive measures for risk reduction, and their willingness to adopt CRI. This represents the fundamental input for the formulation of the CRI model. Consequently, this research proposed an operational structure as input for future implementations of the model. The results indicate that national and local disaster risk management public policies align with the sectors’ needs and priorities. Strengthening sectoral associations can enhance representation in CRI projects. In-kind indemnization is preferred for women entrepreneurs and the indigenous community. The CRI model includes a risk pool through the family compensation fund of La Guajira as a sectoral agglomerator, with contingent credit and traditional/parametric insurance. The methodology developed in this study can be applied in different contexts worldwide as a guidance for informing national and international climate risk finance initiatives.

Philosophical Underpinnings of Social Insurance Mechanisms within the Framework of Health Insurance

Philosophical Underpinnings of Social Insurance Mechanisms within the Framework of Health Insurance

Effects of extreme climate events and child mortality on total fertility rate in Bangladesh

Floods, storms, and temperature extremes are examples of extreme weather events that have a substantial influence on a country's demographic dynamics, including migration, fertility, and mortality. Changes in population size, composition, and distribution may result from these occurrences. This study, which spans the years 1966–2018, looks at how Bangladesh's total fertility rate (TFR) is affected by extreme weather events and child mortality, including neonatal, infant, male infant, and under-five mortality. We use data from secondary publicly accessible sources, such as the World Bank and The Emergency Events Database (EM-DAT), and we investigate the correlations using the autoregressive integrated moving average model (ARIMA), complemented by bivariate and multivariable analyses.Our findings from the univariate analysis are noteworthy. Total extreme climate events (β = −0.345, 95 % CI: 0.510, −0.180), as well as individual extreme climate events, such as extreme temperatures (β = −1.176, 95 % CI: 1.88, −0.47), floods (β = −0.644, 95 % CI: 1.0729, −0.216), and storms (β = −0.351, 95 % CI: 0.63159, −0.07154), exhibited negative associations with the TFR. Additionally, factors such as contraceptive prevalence rate (CPR) (β = −0.085, 95 % CI: 0.09072, −0.07954) and gross national income (GNI) per capita (β = −0.003, 95 % CI: 0.0041123, −0.0024234) were negatively correlated with the TFR. Conversely, various categories of child mortality, namely, infants (β = 0.041, 95 % CI: 0.040474, 0.042748), males (β = 0.038, 95 % CI:0.037719, 0.039891), and under-five (β = 0.026, 95 % CI:0.025684, 0.026979) – are positively associated with TFR. Controlling for two pivotal confounding factors, time and GNI per capita, yielded consistent results in the multivariate analysis. These findings provide insight on the dual impact of extreme weather events, which can reduce TFR while also raising it through infant mortality. This phenomena may be due to the increased vulnerability of younger children in climate-event-prone areas, prompting parents to seek additional children as both a replacement for lost offspring and an insurance mechanism against future child loss.

Efficiency of Agricultural Insurance in Facilitating Modern Agriculture Development: From the Perspective of Production Factor Allocation

Agricultural insurance is instrumental in consolidating the gains of poverty alleviation and advancing rural revitalization. It significantly aids in the efficient allocation of agricultural production factors, which in turn enhances agricultural output and bolsters the evolution of modern agriculture. Therefore, utilizing data from 583 household surveys and employing endogenous transformation and intermediary effect models, this paper analyzes the production factor allocation effect and specific mechanism of agricultural insurance. It focuses on small-scale farmers and new agricultural operators, exploring how insurance contributes to the advancement of modern agricultural practices. The results show the following: (1) Agriculture insurance can significantly affect the agricultural scale input behavior of farmers such as land input scale and input scale, agricultural machinery application behavior such as the degree of mechanization and water conservancy application, agricultural technology adoption behavior, and planting structure selection behavior, thereby helping to modernize agriculture. (2) There is heterogeneity in the impact of agriculture insurance on the allocation of production factors for small farmers and new agricultural operators. For small farmers, agriculture insurance has a significant promoting effect on their agricultural machinery application behavior, agricultural technology adoption behavior, and planting structure selection behavior. For new agricultural operators, agriculture insurance significantly promotes their agricultural scale input behavior, agricultural machinery application behavior, and agricultural technology adoption behavior. (3) In terms of the mechanism of action, agriculture insurance mainly promotes agricultural scale input behavior through land transfer, facilitates agricultural machinery application behavior by purchasing agricultural machinery equipment and services, encourages agricultural technology adoption behavior by strengthening agricultural technology training, and enhances professional production levels by increasing the scale of insured planting, thereby contributing to the development of modern agriculture. Based on this, several policy suggestions have been proposed. These include enhancing the directionality of agriculture insurance policies, improving the collaborative interaction mechanism between agriculture insurance and agricultural credit financing, and adopting certain reward and punishment measures to curb moral hazard.

Juridical Analysis of Legal Protection On Charges Due To Discretionary Authority For Regional Officials

This article reviews the roles and responsibilities of local officials in the use of discretionary powers and the legal repercussions that may arise from their decisions. Through a juridical approach, it investigates the legal protections available to local officials when they face indictments or lawsuits as a result of their discretionary actions. Taking into account the existing legal framework, this article analyzes various factors that may influence whether local officials will be held legally responsible for their discretionary decisions, including ethical, public policy and fairness considerations. In addition, it explores the legal safeguards that local officials can take, including enforceability of laws, liability insurance, and dispute resolution mechanisms. As such, this article aims to provide a better understanding of the complexities of legal protection for local officials in the context of the use of discretionary authority. The results showed that legal protection for regional officials related to the use of discretionary authority can be seen from various aspects, including the principle of legality, the principle of legal certainty and accountability. The juridical analysis of legal protection against charges due to discretionary authority for regional officials shows the importance of a deep understanding of the limits and responsibilities attached to the use of such authority. By paying attention to aspects of legality, legal certainty, and accountability, it is hoped that legal protection for regional officials can be guaranteed in the context of the use of discretionary authority.

State regulation of insurance in agriculture: global experience, analysis of the current situation, prospects

The work focuses on the role of insurance to support sustainable agricultural production in economically developed countries, the importance of public-private partnerships in accordance with the potential of agro-industrial complex. Purpose – mechanism of state regulation of insurance of agricultural risks is considered using the example of the world experience, taking into account the situation in Kazakhstan. Methods – comparison and scientific generalization, review of literature sources on the topic. The study is divided into two stages: analysis of statistical sources on agricultural insurance at the international level from 2020 to 2023; study of domestic practice. Results – advantages and disadvantages of various approaches to insurance of agricultural activities with state participation have been identified. Recommendations for improving the insurance system of agricultural crops and animals in the republic are substantiated, including precise definition of responsibilities and conditions of participation for insurance firms, increasing the level of subsidizing premiums, ensuring the availability of information for farmers and creating a legislative framework. The work also notes the need to adapt international experience to Kazakhstan’s national characteristics. Conclusions - state support for compensation of damage caused by natural disasters, the implementation of the proposed measures will significantly increase the efficiency of agricultural insurance in the country, ensure protection of the interests of farms, stable development of agricultural sector and minimize risks for agricultural producers. The legal mechanism of insurance in agro-industrial complex requires improvement. As a basis for regulation, it is necessary to establish constructive dialogue between stakeholders. To assess the condition of agricultural crops, the use of space monitoring data is of great importance. Agricultural insurance is a potential growth segment and factor in food security in Kazakhstan.

Тенденции развития социальной защиты в разрезе отдельных категорий населения

The relevance of the work is due to the need to systematize modern changes in the field of social protection in relation to certain categories of beneficiaries. The empirical basis of the study consists of materials from an expert online survey of 28 representatives of academic science from 19 Russian cities. The analysis made it possible to draw a number of conclusions. In recent years, priority beneficiary categories have included families with children, elderly citizens, and people with disabilities. Social assistance/support and social services have become the predominant social protection mechanisms that have seen active development in recent years. The urgent need to increase the birth rate has given priority to monetary measures based on the mechanism of social assistance and support implemented at the federal level in relation to families with children. The state has identified social services at the regional level as the key mechanism for meeting the needs of elderly citizens and people with disabilities. Solving the problem of low pensions for elderly citizens and people with disabilities, based on the application of mechanisms of social insurance and social security, requires additional financial resources and changes in legal regulations at the federal level, which are currently unattainable in the near future. Conclusion dwells upon the fact that the development of social protection measures in recent years has been oriented not only towards the needs of beneficiaries but also towards the necessity of swiftly addressing issues relevant to the state. This necessitates the selection of appropriate social protection mechanisms and sources of resource provision for the measures undertaken.

Current Status, Problems and Optimization Suggestions of Financing Mechanism for Urban and Rural Residents' Health Insurance in China

The financing mechanism for urban and rural residents' health insurance has continued to develop, with the financing method further refined on the basis of quota financing, the financing level raised year by year in line with individual contributions and financial subsidies, and the financing responsibility shared by the government and gradually strengthened in terms of individual responsibility. However, the current financing mechanism for urban and rural residents' health insurance is faced with the dilemmas of irrational financing method, insufficient financing level, and unbalanced financing responsibility. In light of this situation, it is recommended that the fixed-ratio financing reform be promoted step by step, that a sound mechanism be established for scientifically determining the financing level, that the sense of individual responsibility be strengthened and the financing responsibility be gradually equalized.

ANALYSIS OF THE LEGAL PROVISION OF ISLAM AND THE MECHANISM OF LIFE INSURANCE

Islamic life insurance is a rapidly growing economic product in the Islamic economic environment. Although there are regulations and fatwas that regulate the mechanism and law of Islamic life insurance, scholars still have differing opinions about its permissibility. This paper aims to analyze Islamic fiqh about the law and mechanism of Islamic life insurance. The research method used is qualitative research with an empirical juridical approach. The analysis results show two main views among scholars regarding the permissibility of Islamic life insurance. Opinions allowing sharia life insurance refer to the principles of sharia and see it as a means of protection that can benefit the community. On the other hand, some opinions reject Islamic life insurance because it is considered to violate the fundamental principles of Islam, such as belief in God's destiny and avoidance of the elements of usury, gharar, and maisir. In the Indonesian context, the National Sharia Council (DSN) of MUI has issued fatwas and regulations related to the mechanism and law of Islamic life insurance. This fatwa is a solution to the two views of fiqh scholars and follows the principles of maqasid sharia.

THE PUBLICATION DEVELOPMENT OF SOCIAL PROTECTION AND CLIMATE CHANGE RESEARCH

Social protection incorporates a variety of interventions, such as cash transfers, insurance mechanisms, and employment safeguards, designed to assist underprivileged households and enable them to cope effectively with various adversities resulting from climate change. Using datasets from the Scopus and Web of Science (WoS) databases, the current study seeks to examine publication trends on research on social protection and climate change. The software packages ScientoPy and VOSviewer are used to analyse the retrieved datasets. This study found that the number of papers on social protection and climate change published in Scopus and WoS since 2000 has increased substantially. The journal “Sustainability” has developed as a significant venue for disseminating research. The study’s findings demonstrated cooperation among researchers from various geographical regions, highlighting the significance of knowledge sharing and the advancement of global solutions. The top ten most used keywords in previous research are “climate change”, “adaptation”, “sustainability”, “welfare”, “animal welfare”, “food security”, “agriculture”, “resilience”, “sustainable development”, and “vulnerability”. The study outcomes provide significant implications for policymakers, researchers, or practitioners to guide decision-making or foster collaborations in social protection and climate change research.

자율주행자동차 상용화에 대비한 자동차보험제도 연구

On May 7, 2016, in the state of Florida, USA, a fatal accident occurred involving an autonomous vehicle and a large truck, leading to the death of the driver. This incident heightened interest in autonomous vehicles and sparked discussions on their implications, including the challenges and liability issues in the event of accidents during autonomous operation. The application of existing legal frameworks, such as Article 750 of the Civil Code on tort liability and Article 3 of the Automobile Damage Compensation Guarantee Act on operator liability, to accidents involving autonomous vehicles raises questions about identifying responsible parties and compensating victims. This study examines the applicability of these legal principles to accidents occurring during autonomous driving and proposes the introduction of a No-Fault insurance system as a novel automotive insurance mechanism to address these issues. The analysis revealed that the No-Fault insurance system, a solution to the problems posed by the current fault-based liability system and already implemented in several advanced countries since the early 2000s, was considered but ultimately not adopted in South Korea due to challenges in amending existing legislation, limitations in calculating insurance rates, and concerns over moral hazard, among other issues. However, as autonomous vehicles are poised to integrate into our lives more rapidly than anticipated, and the social concerns regarding traffic accidents during autonomous operation deepen, it is imperative to form a task force comprising the Ministry of Land, Infrastructure, and Transport, the Financial Supervisory Service, the General Insurance Association, among others, before it's too late. This task force should engage in research and discussions, while building a consensus among the public, to prepare for the new automotive market driven by the autonomous vehicle industry.

Does Directors and Officers Liability Insurance Exacerbate Management Short-Termism?

This paper utilizes data from publicly listed companies spanning the years 2008 to 2022 to examine the influence and underlying mechanisms of Directors and Officers Liability Insurance (D&O insurance) on management short-termism. The analysis reveals that the acquisition of D&O insurance exacerbates the level of short-termism among corporate executives. This result withstands robustness tests employing various fixed effects, additional control variables, and sub-samples. The further mechanism analysis has discovered that the purchasement of D&O insurance exacerbates the management short-termism by alleviating corporate financing limitations, resulting in enormous influence among enterprises in large scales and companies that are not supervised by the big four accounting organizations.The findings of this research contribute valuable considerations for listed companies contemplating the acquisition of D&O insurance, offering meaningful insights for both corporate entities and regulatory authorities.

Mind the Gap: Why Wealthy Voters Support Brexit

Abstract Wealth provides self-insurance against financial risk, reducing risk aversion. We apply this insurance mechanism to electoral behaviour, arguing that a voter who desires a change to the status quo and who is wealthy is more likely to vote for change than a voter who lacks the same self-insurance. We apply this argument to the case of Brexit in the UK, which has been widely characterized as a vote by the ‘economically left-behind’. Our results show that individuals who lacked wealth are less likely to support leaving the EU, explaining why so many Brexit voters were wealthy, in terms of their property wealth. We corroborate our theory using two panel surveys, accounting for unobserved individual-level heterogeneity, and by using a survey experiment. The findings have implications for the potential broader role of wealth-as-insurance in electoral behaviour and for understanding the Brexit case.

Navigating Disability Insurance Uptake: The Complex Interplay of Consumer Confidence, Human Capital, And Financial Perceptions

This study investigates factors associated with purchasing disability income insurance in the United States, emphasizing consumer confidence, perceived financial knowledge, and human capital. The research contextualizes disability income insurance as pivotal to financial stability, addressing the shortfall in personal safety nets and economic equilibrium. The prevalence of disabilities from common illnesses necessitates a thorough understanding of insurance mechanisms. Methods: Using the 2022 Survey of Consumer Finance data, the study employs logistic regression to evaluate the relationship between consumer confidence, financial knowledge, human capital, and sociodemographic characteristics. The methodology intricately controls for age, employment status, marital status, and race, ensuring nuanced analysis. Results: Significant differences across racial groups were identified. Asian participants exhibited the most substantial reluctance towards insurance, whereas a positive correlation between financial knowledge and insurance acquisition was found among Black individuals. Generational analysis indicated varied perceptions, with a marked decrease in insurance propensity among older White and Latino generations. Discussion: The study emphasizes the importance of financial education that caters to various communities. It highlights the significance of cultural and societal norms in financial decision-making, especially among different racial groups. The study also spotlights the role of human capital in accessing insurance, calling for policy interventions that cater to the population’s unique needs. In conclusion, this analysis affirms the significance of consumer confidence in financial decisions and advocates for culturally responsive financial education and policy-making. It also identifies critical areas for enhancing the reach and efficacy of disability income insurance to foster economic resilience and well-being.

Analysis and Reflection on the Operation Status of Residential Special Maintenance Funds

Residential special maintenance funds are large in volume and play an important role in safeguarding people's livelihood. In recent years, many problems have been exposed in the operation of maintenance funds: in management, the funds are unpaid, no value-added power, easy to be misappropriated, and insufficient supervision; in use, the funds are inefficiently utilized, and the application for use is cumbersome, and so on. Compared with developed regions at home and abroad, most of the domestic maintenance fund system changes have not touched the root of information asymmetry. Therefore, this paper tries to summarize the current major domestic problems and domestic and international experiences, in order to prepare for the introduction of insurance mechanism and other mature mechanisms into the residential special maintenance fund management system.

The influence of trauma insurance on quality of life among cancer survivors

This study investigates Australian cancer survivors' Quality of Life (QOL) concerning whether they own trauma insurance. This research examines (1) whether financial planning mechanisms alleviate financial stress, maintaining the QOL of cancer survivors, (2) how receipt of financial proceeds impacts QOL, and (3) whether emotion affects the financial decisions of cancer patients. Researchers used qualitative research methods to investigate the relationship between trauma insurance ownership and QOL in cancer survivors, considering demographic factors such as gender, age and income, type of cancer, treatment type, the meaning of life, financial planning mechanisms, emotional finance, and risk-shifting behavior. Findings show a general decrease in the QOL of survivors without trauma insurance and less change in the quality of life of survivors with trauma insurance. We attribute this difference to the additional benefits survivors buy with their insurance proceeds. Trauma insurance and other financial mechanisms function to mitigate financial stress.

Chain-of-Thought Improves Text Generation with Citations in Large Language Models

Previous studies disclose that Large Language Models (LLMs) suffer from hallucinations when generating texts, bringing a novel and challenging research topic to the public, which centers on enabling LLMs to generate texts with citations. Existing work exposes two limitations when using LLMs to generate answers to questions with provided documents: unsatisfactory answer correctness and poor citation quality. To tackle the above issues, we investigate using Chain-of-Thought (CoT) to elicit LLMs’ ability to synthesize correct answers from multiple documents, as well as properly cite these documents. Moreover, we propose a Citation Insurance Mechanism, which enables LLMs to detect and cite those missing citations. We conduct experiments on the ALCE benchmark with six open-source LLMs. Experimental results demonstrate that: (1) the CoT prompting strategy significantly improves the quality of text generation with citations; (2) the Citation Insurance Mechanism delivers impressive gains in citation quality at a low cost; (3) our best approach performs comparably as previous best ChatGPT-based baselines. Extensive analyses further validate the effectiveness of the proposed approach.