Management Of Insurance Companies Research Articles

Perception of Information Security of Management of Banking and Insurance Companies in Countries of Western Balkans

In this paper it is described aspects of standardisation of information security and itsimplementation in banking and insurance companies in countries of Western Balkans. Interms of approaching the standards of EU, one of the areas that need to be fully justified isthe information security. It has been identified and applied a new dual methodology whichcovers measurement of same variables of information security into two opposite populations.Authors identify banking and insurance sector as a key sector for research due to sensitivityof financial data and information that these companies work with. Key obstacles inimplementation of information security come from managers who consider that existing levelof information security is on much higher level than it actually is. The authors have identifiedintensity of perception of information security and gap in perception between managers offinancial institutions and auditors, and rank of significant properties of information security.Factor analyses were conducted and four factors were identified which show managers’perception of information security. Also, the authors have identified attributes of marketingaspects of information security and market potential of information security of banking andinsurance sector in countries of Western Balkans.

자동차 보험 거래에 있어서 전자적 채널 이용 의도의 영향 요인: UTAUT 모델의 응용

Electronic channel of automobile insurance has emerged as an attractive way of lowering costs and saving time to do the transaction for customers. Electronic channel refers to using web sites to find useful information on insurance products, buy automobile insurance, and ask for services related to the insurance. This study suggests a modified model of the UTAUT and examines the factors influencing intention to use electronic channel in the transaction of automobile insurance. Based on 203 responses from potential automobile insurance buyers, the results showed that performance expectancy, effort expectancy, social influence, service expectancy, and security risk are significantly related to intention to use electronic channel. The results also showed that age as a moderator influences the effects of performance expectancy and effort expectancy on intention to use electronic channel. The study results would improve the understanding of the factors to which managers of insurance companies should pay attention in order to increase their sales through electronic channel.

The Impact of Mortality Risk on the Asset and Liability Management of Insurance Companies

In this paper, we investigate the change in mortality rate and its impact on annuity liabilities using the Lee-Carter model. Our findings suggest that the insurer suffers a higher risk of insolvency if macroeconomic factors are used in forecasting mortality rates. A hybrid actuarial model, which consists of both annuity and life insurance, is employed to assess an opportunity for natural hedging. We examine the insurer’s insolvency probability while controlling for impact factors, such as the equity contribution, investment allocation and dividend policy. Insurers – who have both life insurance and annuity liabilities – tend to suffer a balanced, lower financial risk and also tend to be more competitive in the market, thus providing the insurer with a natural hedging opportunity to improve financial stability.

Operational Risk Management for Insurers

Insurance companies face many risks, which should be managed, but their core competences and main contribution to society is to accept the risks underwritten by businesses and individuals, hence the strategic importance for citizens and governments that insurers protect their assets and revenues, and that policies and scientific methods are established to ensure a minimum financial solvency and the continuity of its operations. Operational risk is increasingly important in the management and corporate governance of insurance companies, which increasingly have greater implications and interactions with the other risks that this insurers face, such as market or credit risks. The management and analysis of operational risk is a necessary activity for insurers, presenting many opportunities for development and a major field of study on conceptual and practical issues due to the particularity and complexity implied in this type of risk. The new European regulation, Solvency II, will inexorably increase the need of an effective management of operational risks and the development and implementation of structured methodologies for its analysis. It is also reviewed the classical technique of modeling, Value at Risk (VaR), and other methodologies for the analysis and quantification of operational risk for insurers.

Pharmaceutical policies used by private health insurance companies in Saudi Arabia

BackgroundCurrently, the Council of Cooperative Health Insurance (CCHI) is the body responsible for regulating health insurance in the KSA. While the cooperative health insurance schedule (i.e., model policy for health insurance) is available on the CCHI web site, policies related to pharmaceuticals are ambiguous. AimsThe primary objective of this study was to assess the impact of health insurance policies provided by health insurance companies in KSA on access to medication and its use. Settings and DesignThis study was descriptive in design and used a survey, which was conducted through face-to-face interviews with the medical managers of health insurance companies. Methods and MaterialThe survey took place between March and June, 2011. All 25 insurance companies accredited by CCHI were eligible to be included in the study. Out of these 25 companies, three were excluded from this survey as no response was received. ResultsAll the 16 companies responded “Yes” that they had a prior authorization policy; however, their reasons varied. Eight (50%) of the companies were concerned about the duration of treatment. While 10 (62.5%) did not offer additional coverage over the CCHI model policy, the other 6 (37.5%) reported that they could reconcile certain conditions. The survey also demonstrated that 10 insurance companies allowed refilling of medication but with certain limitations. Six out of the 10 permitted refilling within a maximum time of three months, whereas the other four companies did not have any time-based limits for refilling. The other six companies did not allow refilling without prescription. ConclusionsAlthough this paper was primarily descriptive, the findings revealed a substantial scope for improvement in terms of pharmaceutical policy standards and regulation in the health insurance companies in KSA. Additionally, the study highlighted such areas to augment the overall quality use of medication, over-prescribing and irrational use of medication. Further research, thus, is definitely needed.

Antecedents of Insurance Agents’ Loyalty for Different Forms of Transaction-Specific Investments in the Turkish Insurance Sector

This article's first aim is to investigate the effects of trust, satisfaction, transaction-specific investment (TSI), perceived value, and corporate reputation on loyalty in business markets. The second aim is to analyze and compare the effects of these variables on loyalty in symmetrical and asymmetrical TSIs. Prior research has examined the interactions among these constructs, mainly in relationships between businesses and consumers. In this article, we test hypotheses among these constructs using data obtained from insurance agents in a business-to-business context. The research findings show that trust, satisfaction, perceived value, and the insurance agent's perceptions of the insurance company's TSIs have a direct effect on loyalty. Trust, satisfaction, and perceived value have an effect on loyalty in both symmetric and asymmetric TSI conditions. The study suggests that managers in insurance companies should develop strong behavioral and emotional ties with agent firms as part of their relationship marketing strategy. Finally, theoretical and managerial implications of the study findings are discussed.

Asset management in the German insurance industry: the quality of interest rate forecasts

Chopra and Ziemba (J. Portf. Manag. 19: 6–11, 1993) show that for asset only allocations the return forecasts are more important than assumptions about the variance-covariance matrix of the returns. Following Basse et al. (ZVersWiss 96: 617–648, 2007) the same holds true for the asset liability management (ALM) of insurance companies. Given the high quotas of bonds in the real as well as optimized insurance portfolios, interest rate forecasts are of exceptional importance. Therefore this paper examines some of these estimates for the European market using techniques of time series analysis. A set of criteria for the evaluation of the forecasts is presented. While some results seem to be quite favorable for forecasters, others indicate that none of the analyzed forecasts seems to provide relevant information about the future development. There is lot of evidence showing that interest rates are very difficult to predict. Some hints clearly point towards herd behavior among forecasters.

Comparison of Stakeholder Perspectives on Current Regulatory and Reporting Reforms

AbstractIn the European insurance industry, regulatory and reporting frameworks are currently subject to far‐reaching reforms. We focus on four of these frameworks, namely the Solvency II framework, insurance guaranty systems, the proposed IFRS 4 Phase II international accounting standards, and Market Consistent Embedded Value reporting. We present these frameworks, analyze them from the insurance company's management, investors, and policyholder perspectives, and compare them. Our analysis implies that the four frameworks need to be considered jointly, due to various interrelations and interactions. We argue that a coordinated introduction will be necessary to ensure that the regulatory burden is reduced and synergies can be utilized in the event of all four frameworks being implemented as planned. Furthermore, we analyze the challenges of a holistic, comprehensive approach to insurance reporting and regulation and its implementation in order to achieve the goals set by the frameworks.

Reputational Signals and Capital Acquisition When Insurance Companies Go Public

We analyse reputational signals and decisions surrounding capital acquisition by examining 76 insurance firms going public from 1996 to 2006. We first explore the relationship between proxies for insurance firm reputation and initial public offering (IPO) underwriter reputation. In general, we find that more reputable underwriters market IPOs of more reputable insurers—insurers that are less risky, more likely to be life insurers and that have higher franchise value. These results suggest that underwriter and insurer reputations are aligned and send consistent signals. Second, we show that the market requires a higher return from riskier/less reputable insurers when they go public. When we compare the performance of our insurance company sample to a matched sample of non-insurance firms, we find that the greater reputational transparency of insurers allows the market to do a better job of determining future performance. Last, we conclude by showing empirically that franchise value and the reputational posture of the insurance firms are positively related. These results contribute to the growing body of knowledge on reputational risk management and should enhance capital acquisition strategies of insurance company managers.

Main Determinants of Lapse in the German Life Insurance Industry

This paper studies the determinants of lapse in the German life insurance industry. Logistic regression models are employed using data on macroeconomic indicators and company characteristics of 133 German life insurers from 1997 to 2009. Five different product categories are considered (endowment, annuity, term life, group, and other). The findings indicate that the main lapse determinants are very similar across all product categories, except that the direction of impact is reversed for the product category “other”, which consists almost exclusively of unit-linked business. In particular, the interest rate and emergency fund hypotheses are supported only for unit-linked business, while these hypotheses do not hold for the remaining product categories. Overall, the analysis provides an understanding of lapse dynamics related to economic indicators and company characteristics. The derived models can be used to predict lapse rates for the different product categories considered. The results are important for insurance company managers, regulators, and life insurance customers.

Leadership Styles and Orientation of Sales Managers in Insurance Sector

In this paper, an attempt was made to study the leadership styles and orientation of sales managers in the insurance sector. The sales managers are team leaders, who have to motivate, guide and coach the members towards key result. To study the leadership styles exercised by the sales managers, orientation for task and orientation for people were examined. Their scores were plotted into Blake and Mouton's managerial grid matrix to understand their leadership styles. 60 sales managers of private insurance companies in Vellore were identified for the study through snow ball technique of sampling. The result revealed that the size of the team was significantly related to frequency of team meetings and achievement of targets. Also, task orientation and people orientation were considered relatively important by the sales managers in leading their team. 96.7% of the respondents exhibited Team Leader style in varying degrees.

Does Surplus Participation Reflect Market Discipline? An Analysis of the German Life Insurance Market

The aim of this paper is to analyze whether the level of surplus participation affects customer demand. We use multivariate linear regression models and data on surplus participation, new business, and lapse for the German life insurance market from 1998 to 2008. We find a significant positive dependence between surplus participation and new business growth as well as a significant negative dependence between surplus participation and growth of lapse volume. Overall, these findings indicate that customers do react to changes in product characteristics, which might be seen as indicative of market discipline. Our results are important for insurance company managers, regulators, and boards of insurance associations.

Reinsurance Management in Insurance Companies in Case of General Third Party Insurance

Reinsurance Management in Insurance Companies in Case of General Third Party Insurance

The private interests of consumers in the healthcare market

PurposeThis paper sets out to examine how private health insurance (PHI) supports the private interests of consumers of healthcare services. The focus is on how insurance companies promote PHI to consumers.Design/methodology/approachUsing interviews with insurance company marketing managers and others, the paper is a case study on the introduction of PHI in Sweden.FindingsThe interviewed insurance company managers argue that PHI supports two types of consumers' private economic interests. One type is the employers' interest in managing their total health‐related costs for their employees and the promise of PHI to reduce these costs. The second type relates to the interests of employees, particularly sports professionals, in managing economic risks and the promise of PHI to limit such risks.Research limitations/implicationsThe paper focuses on how insurance companies promote PHI to consumers. There is no exploration of how PHI policyholders actually use their insurance. The study focuses on Sweden where private companies are the major PHI policyholders. In other European countries, PHI may be adapted to other consumer groups in order to develop other private interests. The paper points to the value of short waiting times in public healthcare.Originality/valueThe paper provides valuable insights for academics and practitioners who are interested in how the private interests of consumers may affect the healthcare sector.

Spatial Variability in Mortality and Socioeconomic Factors for Australian Mortality

Mortality rates are known to vary by geographical location and to depend on socio-economic factors. Demographic, ethnic and socio-economic mortality factors vary by geographical location. Regions that are in closer proximity are expected to have similar mortality because of similar socio-economic factors and demographic characteristics. In this paper the spatial variability of Australian mortality is assessed using a spatial model along with explanatory risk factors including age, income, labour force participation and unemployment rate. Geo- graphical variation is based on statistical subdivisions, areas of similar social and economic backgrounds. Logistic regressions are estimated using an hierarchical Bayes model with Markov Chain Monte Carlo methods for mortality rates in 208 statistical subdivisions in Australia for census years 1996, 2001 and 2006. Spatial models explain mortality variation by geographical location better than non-spatial models when limited data is available for socio-economic factors. Explanatory factors, which also vary spatially, reduce the need for spatial models for mortality. The modeling has implications for pricing and risk management in life insurance companies. Geographical variation in risks can be quantied using spatial models especially if there is limited data for risk factors that gen- erate mortality heterogeneity. Employment and workforce participation, ethnic background as well as income are found to be signicant in explaining mortality variation by geographical location in Australia. Geographical location has been used recently in the UK based on postcode in pricing and risk management of mortality and longevity risk products. As demonstrated in this paper, spatial geodemographic models should be of signicant interest to insurers in assessing mortality risk.

A global approach for financial flows management in insurance companies. The Italian experience.

In insurance companies the financial flows' dynamics is influenced by heterogeneous factors, some of them linked to technical features of insurance field and some others common to all financial dealers (i.e. market risks). The main recent changes which took place within the insurance field intensified competitive pressure and underlined the key role of financial area in defining the overall firms' profitability and imposing, at the same time, a higher attention to the financial risk control. Particularly important is the interest rate risk, for its effect on financial flows and on solvency firms conditions. Knowing that financial and technical activity are related in insurance companies, the main research question is: it is still worthy to look separately risks and investment policies or if it is better to acknowledge a new important management variable which fosters a global management approach (Asset and Liability Management - ALM), within a decisional process oriented to the long term firm value creation and to the stabilization of profit margins?

Preparing Taiwanese Students for Insurance Industry Jobs: Curriculum Reform and Evaluation

Abstract Given the environment of the recent financial tsunami and a slowdown in global economy, to meet long-term hiring needs, insurance companies hope to recruit highly qualified graduates who do not require extensive and expensive training. On the other hand, the departments of risk management and insurance (DRMI) in universities must engage in improving their curricular to better equip and enhance their students’ employability. Therefore, both the human resources management in life insurance companies and curricular designers in the DRMI need an effective evaluation method to provide an accurate solution in problems of employee selection and curricular design. This paper proposes a curriculum performance evaluation method combining the analytical hierarchy process and Grey relational analysis. Using this evaluation method enables the human resources managers in life insurance companies to identify which university designs the most appropriated curriculum that can educate students to become the talented, skilled, and well-prepared labor force to satisfy hiring needs. Moreover, to explore the outcome of this evaluation, the DRMI can accordingly improve their curricular.

An Actuarial Approach to Comparing Early Stage and Late Stage Lung Cancer Mortality and Survival

Comparing the mortality characteristics of different cohorts is an essential process in the life insurance industry. Pseudodisease, lead-time bias, and length bias, which are critical to determining the value of cancer screening, have close analogues in life insurance company management, including the temporal impact of underwriting. Ratios of all-cause mortality rates for cancer cohorts relative to standard population mortality rates can provide insights into early stage and late stage mortality differences, differences by age, sex, race, and histology, and allow modeling of biases associated with early stage detection or screening protocols. The Surveillance, Epidemiology and End Results (SEER) data set has characteristics that allow efficient application of actuarial techniques. We show the mortality burden associated with treated early stage lung cancer and that identifying all lung cancers at early stage could reduce US lung cancer deaths by over 70,000 per year.

Методи зниження маркетингових ризиків страхової компанії

Методи зниження маркетингових ризиків страхової компанії

Asset Liability Management in Insurance Companies and Banks: Quantitative Models

The Book presents a survey on the principal quantitative models on Asset Liability Management in Insurance Companies and Banks. It goes through the duration and the market value approach till the stochastic optimization. The model, by using a contingent claim approach, determines the fair value of the insurance life policies. Furthermore, it shows that the value of equity can be immunized with respect to the movement of interest rate. Moreover, the model determines the fair value of the banks liabilities accounting for the protection and the surrender possibility. Furthermore, it determines the implied duration of banks liabilities so to show that the surrender possibility will reduce the effective duration of banks liabilities. Implications for the immunization are also treated. In recent years is born the stochastic optimization by combining the asset allocation with the liabilities side by maximizing the surplus with some constraint. An analysis of interest rate models are also treated.