Operation Of Insurance Companies Research Articles

Izveštaj o tokovima gotovine i finansijsko odlučivanje u društvima za osiguranje

Cash management is of great importance for the successful operation of insurance companies, and the amount of cash is affected by many management decisions. Often you might encounter in the financial papers and textbooks the assertion that cash is the 'bloodstream' of business. In this respect, it is emphasized that it is important for the accountants to provide timely information on cash flows. The report that is especially important for financial decision-making is the statement of cash flows, if one bears in mind that insurance companies take risks in dealing with intangible products, and therefore need to be sufficiently liquid and solvent to pay the obligations that are arising from claims at the time of the accident or the occurrence of hazards.

The Empirical Study on Factors Influencing Investment Efficiency of Insurance Funds Based on Panel Data Model

Investment efficiency of insurance funds reflects ability of capital operation of insurance companies, which is crucial of great importance to the continuous stable operation and long-term development of insurance companies. By using panel data of 23 insurance companies of China in 2007-2014 on an empirical study on relationship between investment efficiency of insurance funds and factors influencing investment efficiency, result shows that asset size is negatively correlated with using efficiency of insurance funds; fixed term deposit-rate has significantly negative effects on investment efficiency of insurance funds, long-term securities investment-rate does prominently positively; market share significantly improves investment efficiency; comprehensive operating fee-rate has a negative effect on investment efficiency, The quality of investment department staffs plays a positive role on investment efficiency, but results are not significant.

Изучение предпочтений потребителей услуг страховой компании на основе критериев согласия при помощи CHAID-анализа

The article considers modern trends in the insurance market development in the Russian Federation, and reviews the main insurance products and the dynamics of their implementation over the past few years. The authors identify the necessity for improving the insurance services quality, active work with consumers, and development of targeted packages of services, corresponding to the specific needs of individual customer segments. 
 Based on the case of regional insurance company operating on the local insurance market in the city of Novosibirsk, the article analyzes the socio-demographic and economic characteristics and their impact on the probability of choosing insurance products. Using Pearson's chi-squared test, the authors have accomplished statistical review of 30 hypotheses in order to reveal the relationship between the characteristics of consumers and their choice of various insurance products. 
 Using CHAID-analysis, the one of the most popular technologies for data mining, allowed authors to distinguish different homogeneous groups of consumers for each of the insurance products considered. Based on the study, the authors have constructed classification schemes of insurance services consumers. This led to the conclusion that age and marital status are most significant consumer characteristics for the segmentation. On the other hand, the study of the constructed consumer classification schemes shows that such indicators as “children" and "income" practically do not influence the choice of insurance products. 
 Also, a study using CHAID-analysis made it possible to determine which types of insurance services allow the most effective joint combinations. In turn, it allowed to form four specially selected packages consisting of several insurance products to maximize the satisfaction of the company's customers.

基于面板数据模型的险资投资效率影响因素实证研究

投资收益是保险公司的主要利润来源，保险资金投资效率体现了保险公司资金运用能力，对保险公司的持续稳健经营和长远发展至关重要。本文利用2007~2014年中国23个保险公司的面板数据对险资投资效率与其影响因素之间关系进行实证研究，结果表明：资产规模与保险资金运用效率呈现负相关；定期存款投资比例对保险资金投资效率的影响显著负相关，而长期类证券投资比例对保险资金投资效率的影响显著正相关；市场份额扩大显著提高了保险资金的投资效率；综合营业费用率对保险资金投资效率起消极作用，投资部门劳动者素质对投资效率有正向影响，但影响结果都不显著。 Return on investment is the major source of profits of insurance companies. Investment efficiency of insurance funds reflects ability of capital operation of insurance companies, which is crucial of great importance to the continuous stable operation and long-term development of insurance companies. By using panel data of 23 insurance companies of China in 2007-2014 on an empirical study on relationship between investment efficiency of insurance funds and factors influencing investment efficiency, result shows that asset size is negatively correlated with using efficiency of insurance funds; fixed term deposit-rate has significantly negative effects on investment efficiency of insurance funds, long-term securities investment-rate does prominently positively; Market share significantly improves investment efficiency; Comprehensive operating fee-rate has a negative effect on investment efficiency. The quality of investment department staffs plays a positive role on investment efficiency, but results are not significant.

Predviđanje poslovnih rezultata primenom regresionih modela

In terms of modern business practice, business prediction results are crucially important for evaluation of future financial performance of a company. Planning and prediction procedures are especially important for companies operating under uncertainty. This paper shows an example of planning and prediction of business results in insurance when calculating premium trend by use of linear and nonlinear regression. Due to the uncertainty associated with the moment of claim occurrence and claim amount, it is necessary to secure enough assets to cover the risks. Asset-liability matching requires the prediction of future premium movement per insurance lines which represents the basic concept of development and operation of insurance companies.

The assessment of solvency and determination of limits for risk acceptance in insurance companies

The subject of this paper is the presentation of key requirements for Solvency II project, the methodology for testing of capital adequacy and methods for identification, definition and establishment of risk limits, as a limit for acceptance, bearing and control of exposure to certain risks in insurance companies. The aim of the paper is to show that the capital adequacy is the key factor for insurers' safety, i.e. guarantee of capability of an insurer to settle any future liabilities and leverage for strengthening of insurer's market position. Business operations of insurance companies are exposed to a significant number of risks that differ by their nature, character and influence, due to which adequacy of calculated technical reserves does not provide a satisfactory level of safety in case of more significant impairments of assets and funds of insurers, as well as in case of significant deviations between amounts of settled claims and actuarially expected amounts of liabilities based on claims. Stress testing of capital adequacy will show that losses due to impairment of risky securities, difficult collection of low liquid, i.e. securities that are difficult to market, inability to collect receivables from reinsurers, as well as losses due to inadequately calculated reserved claims, must be covered by a solvent capital. The paper is structured so as to provide a review of rules, elements and principles that are the foundation of solvency requirements in insurance companies, methodologies of calculation of guarantee reserve, technical basis for stress testing which assesses capital adequacy of insurers, as well as methods for establishment of limits of exposure to certain risks.

Comparative Financial Performance Measurement Of Green Delta And Reliance Insurance Company Limited In Bangladesh: An Analytical Study

Insurance is a way of shifting the risk of loss from one to another in exchange of payment. The growth of insurance industry in Bangladesh is relatively remarkable during the last two decades due to operation of private insurance companies. This paper examined the comparative performance of first generation two insurance companies with different ratios and regression analysis for the period of 2008–2013. The findings showed that there is a significant association among net income, premium income and firm size. The results also showed a mixed performance of the selected companies over the study period. Average performance of GDICL was far better than RICL but RICL was outstanding in steady performance during the study period.

Monopoly and competition on Bulgarian pension market

Challenges facing social security system in Bulgaria occurred as a result of radical political and economic changes after 1989 call for a reform and a new philosophy in the social security system. Multi-pillar pension system was introduced and the operation of private pension insurance companies was launched. Amid deepening demographic crisis and worsening economic climate the future role of supplementary pension insurance is essential for the achievement of expected results of the pension reform. The article’s main goal is to study how pension insurance companies in Bulgaria operate in the free market environment. To achieve this goal the following tasks are completed: ● Analyzed are the market concentration and market shares of the pension insurance companies and the net assets managed by them from mandatory and voluntary funds; ● Analyzed are some of the existing problems and measures are proposed to overcome them. The methods utilized during the study are the system approach, statistical evaluations, analysis and synthesis, comparison methods and others.

Deriving the Equation for the Non-Ruin Probability of the Insurance Company in (B, S)-market. Stochastic Claims and Stochastic Premiums

The integro-differential equations for the non-ruin probability, on finite and infinite time intervals, for the insurance company operating in the (B, S) -market are derived for the Cramer–Lundberg model with stochastic premiums. To derive the equations, no smooth distribution densities of premiums and claims are required. The examples are considered where the problem is reduced to the solution of differential or integral equations.

The Determinants of Corporate Image for Life Insurers in Taiwan

Abstract This study attempts to analyze the relationship between corporate image and business operation of life insurance companies in Taiwan. Based on the performance indicators in underwriting and financial constructs, this study conducts regression analysis to find the influential factors for corporate image of life insurers. This study finds that both underwriting and financial operations have considerable impacts on the corporate image of life insurance companies. The results indicate that consumers evaluate the corporate image based on not only the financial performance but also the quality of underwriting management, such as services provided by the insurers. The company background (e.g. subsidiary of financial holding companies or foreign insurers) does not significantly influence the corporate image. The findings of this study suggest that the life insurance companies in Taiwan should pay more attention to the underwriting activities and service quality in order to enhance their corporate image.

Collective risk model in non-life insurance

The operation of business insurance companies, based on assuming risks of different profiles, is accompanied by fluctuations in the business environment. The complexity of predicting a financial effect for claims in non-life insurance lies in the structure of insurers' liabilities, whose amount cannot be determined at the time of payment of the premium. By analyzing the key insurance processes, risk theory focuses on modeling claims as the financial consequences of unforeseen events. In addition, it provides the answer as to how much of a premium to charge in order to avoid bankruptcy, which makes it a complex and topical research area. The paper presents the main results of the collective risk model for the key business processes of nonlife insurance companies: the claim number process and the claim amount process. In risk theory, these are treated as stochastic processes, which offers a wide range of possibilities for the modeling and simulation of specific business problems.

Adaptation to Climate Change: Threats and Opportunities for the Insurance Industry

In this paper we explore why adaptation to climate change is such a critical issue to the commercial success of the private insurance industry. We highlight both the risks arising from inadequate adaptation to the impacts of climate change, and the opportunities presented by playing a role in the global response to adaptation. We demonstrate that the success, or not, of adaptation to the impacts of climate change will be relevant to both the underwriting and investment operations of (re)insurance companies. In the short term, climate change will affect underwriting practices by necessitating risk quantification approaches that include a forward-looking view of risk that is not purely grounded in historical experience. In the longer term, insufficient adaptation in areas of rising risk could threaten the concept of insurability itself, by limiting the availability and affordability of private insurance coverage. Furthermore, we demonstrate that activities that incentivise and enable adaptation not only give rise to commercial opportunities and reputational reward, but are increasingly necessary for the sustainability of the industry.

Nigerian Insurance System And Cost Control

The stocks of most insurance companies in Nigeria are not enjoying investors' confidence and patronage because of low return on investment among other related reasons. This is not unconnected with low profits usually declared by insurance companies. One of the reasons for this low profitability is the high operating costs that usually characterize the operations of insurance companies in Nigeria. The article therefore examines the nature of operating costs control and its importance for business survival. It also highlights the strategies insurance companies could employ in reducing their operating costs and guaranteeing consistent profitability. Data were collected from the Annual Reports of 15 randomly selected insurance companies in Nigeria for the period 1996-2005. Multiple regression coefficient and analysis of variance were used in establishing by how much total operating cost will increase/reduce if there is a percentage increase/decrease in expenses and claims and whether there is a significant difference in operating costs as a result of management expenses, commissions and claims expenses respectively. The paper concludes that insurance companies wishing to survive and maintain earnings in the face of today's adverse and competitive operating environment must as a deliberate policy include operational costs control in their strategy portfolio. Keywords: keywordOperating Cost, Cost Control, Premium Income, Claims, Underwriting Profit JORIND Vol. 6 (1) 2008: pp. 10-10

Estimation of the ruin probability of an insurance company operating on a BS-market

We obtain an estimate for the ruin probability of an insurance company that invests a part of its capital in stocks and puts the rest of the capital in a bank account. An insurance premium is established depending on the capital of the insurance company.

To Hedge or Not to Hedge: Managing Demographic Risk in Life Insurance Companies

AbstractDemographic risk, i.e., the risk that life tables change in a nondeterministic way, is a serious threat to the financial stability of an insurance company having underwritten life insurance and annuity business. The inverse influence of changes in mortality laws on the market value of life insurance and annuity liabilities creates natural hedging opportunities. Within a realistically calibrated shareholder value (SHV) maximization framework, we analyze the implications of demographic risk on the optimal risk management mix (equity capital, asset allocation, and product policy) for a limited liability insurance company operating in a market with insolvency‐averse insurance buyers. Our results show that the utilization of natural hedging is optimal only if equity is scarce. Otherwise, hedging can even destroy SHV. A sensitivity analysis shows that a misspecification of demographic risk has severe consequences for both the insurer and the insured. This result highlights the importance of further research in the field of demographic risk.

Chemical Financial Corp.

AbstractCommercial Banking (MIC: 8.1 SIC: 6022 NAIC:522110)Chemical Financial is a bank holding company headquartered in Midland, MI, with total assets of $3.71 billion as of Dec 31 2003. Co.'s four subsidiary banks, CB&T, Chemical Bank Shoreline, Chemical Bank West and State Bank of Caledonia, operate 133 branch offices and two loan production offices throughout 33 counties in the lower peninsula of Michigan. Non‐bank subsidiaries include CFC Financial Services, an insurance company operating under the assumed names Chemical Financial Insurance Agency and CFC Investment Centers, and CFC Title Services, an issuer of title insurance to buyers and sellers of residential and commercial mortgage properties.

Chemical Financial Corp.

Mergent's Dividend AchieversVolume 2, Issue 2 p. 51-51 U.S. Company Report Chemical Financial Corp.† First published: 22 April 2005 https://doi.org/10.1002/div.2222 † Contact: : Frank P. Popoff — Chmn. Address: : 333 East Main Street, Midland, MI 48640-0569 Web Site: : www.chemicalbankmi.com AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Abstract Commercial Banking (MIC: 8.1 SIC: 022 NAIC: 22110) Chemical Financial is a bank holding company headquartered in Midland, MI, with total assets of $3.71 billion as of Dec 31 2003. Co.'s four subsidiary banks, CB&T, Chemical Bank Shoreline, Chemical Bank West and State Bank of Caledonia, operate 133 branch offices and two loan production offices throughout 33 counties in the lower peninsula of Michigan. Non-bank subsidiaries include CFC Financial Services, an insurance company operating under the assumed names Chemical Financial Insurance Agency and CFC Investment Centers, and CFC Title Services, an issuer of title insurance to buyers and sellers of residential and commercial mortgage properties. Volume2, Issue2Spring 2005Pages 51-51 RelatedInformation

Determinants of United Kingdom General Insurance Company Performance

ABSTRACTDynamic financial analysis has become one of the important tools that actuaries use to model the underwriting and investment operations of insurance companies. The first step in carrying out the analysis is to investigate the most important factors affecting company performance. This paper identifies the determinants of the performance of United Kingdom general insurance companies using a panel data set consisting of economic data and Financial Services Authority/Department of Trade and Industry returns over the period 1986 to 1999. Three performance measures are used to capture different aspects of insurance operations. These measures are related to a number of economic and firm specific variables, chosen on the basis of relevant theory and literature. An ordinary least squares regression model and two panel data models are estimated for each of three performance measures. This paper also addresses several important econometric problems that are usually ignored in applied work in the context of panel data analysis. Based on the empirical results, this study finds that liquidity, unexpected inflation, interest rate level and underwriting profits are statistically significant determinants of the performance of U.K. general insurers.

The Search for an International Accounting Standard for Insurance: Report to the Accountancy Task Force of the Geneva Association

This paper seeks to provide an understanding of the background to the search for an international standard for insurance contracts, which was initiated by the International Accounting Standards Committee (IASC) in 1997 and is still proceeding under its successor, the International Accounting Standard Board (IASB). To do this the paper traces the evolution of the fair value initiative of the IASC/IASB which at the outset was envisaged for all financial instruments, but over time has been amended as the standard setters realized that there would be major problems of implementation, after listening to the views of preparers, particularly the commercial banks, and users, including financial services regulators. The paper identifies the origins of the fair value framework as emanating from an earlier accounting framework based on current values that was intended to be applied generally to all enterprises. The current value initiative, although conceptually sound, has only been adopted in part, again because of problems of implementation. The theoretical underpinning of the current value and fair value accounting approaches are discussed. The paper attempts to show why any early resolution to the insurance contracts project has proved so difficult. This difficulty is evidenced by the fact that insurance contracts have been excluded from the scope of the accounting standard for financial instruments in the United States, FAS 133, as it was clearly recognized that there is no ready market to trade and hence determine fair values for insurance contracts. It concludes by addressing some general factors that must be kept in focus when developing an international accounting standard and some particular factors that should be considered if there is to be a workable and transparent system of financial reporting which captures the economic substance of the commercial operations of insurance companies. Part of the suggested solution is to integrate the insurance contract project more into the revised proposed standard for all financial instruments, IAS 39, and for the IASB to work more closely with insurance companies, especially with their in-house accountants and actuaries. This greater co-operation is now possible as the project moves into the field testing stage.

Private Versus State Systems for Industrial Accidents and Invalidity Insurance in the U.K.

The Employers Liability System (EL) is supported by compulsory insurance the majority of which is provided by proprietary insurance companies. The Department of Trade and Industry is the regulatory body governing the operation of insurance companies. The legislation applicable to employers liability insurance is the Employers Liability (Compulsory Insurance) Act 1969, with Regulations issued in 1971, 1975 and 1994 governing the operation of the Act. The statutory provisions for compulsory insurance are currently under review. This follows changes in operating practice with insurance companies no longer providing unlimited liability cover under employers liability insurance. The main focus of attention relates to the statutory minimum limit of indemnity which is £2m any one occurrence, any one employer. Insurance practice is to provide a standard limit of indemnity of £10m