Towards a Global Solvency Model in the Insurance Market: A Qualitative Analysis

In recent years, there has been a change in the main regulations governing the solvency of the world’s main insurance markets. Sustainability is an issue that is becoming increasingly important among to the various stakeholders in the insurance industry. It is a complex concept that has many different dimensions that can be included in these regulations, allowing for a more sustainable solvency. The paper uses a qualitative model previously designed and tested in the literature to analyse the solvency regulations of the European Union, United States of America, China, Australia, Brazil and South Africa and determine their level of convergence. It also links the criteria set out in these models to the dimensions of sustainability in order to determine the degree of sustainability of solvency systems and the questions that regulators will need to consider in the near future in order to achieve more sustainable solvency.This research was funded by Consolidated Research Group Eusko Jaurlaritza/Gobierno Vasco EJ/GV grant number IT1523-22

A study of risk management and capital allocation in Korean Insurance Companies

Thesis (S.M.)--Massachusetts Institute of Technology, Sloan School of Management, 2011.Cataloged from PDF version of thesis.Includes bibliographical references (p. 52).The Korean life insurance industry has rapidly grown over the past decades. The CAGR (Compounded Annual Growth Rate) of asset from 1978 to 2008 is 22.8%. As the asset size increases very fast, risk management plays a vital role in the Korean life insurance industry. Before the financial crisis in 1998, the risk management system was very weak in Korea. It was because the government controlled and protected the life insurance companies. However, the financial crisis brought changes in risk management. 7 of 30 insurance companies were bankrupt in financial crisis. The survivors also suffered from the absence of risk management system. But the financial crisis fostered the ability to propagate in the wild. Korean insurance companies started to realize the risks and built up a risk management system with their experiences. With this effort, they quickly overcame the recent global financial crisis. But there is still room for improvement. Especially, they have not dealt with the risk allocation which is an essential part in risk management. In this paper, I will discuss the current risk management system and capital allocation in the Korean life insurance industry.by Jungmoo Huh.S.M

Assesing Completeness of Solvency and Financial Condition Reports through the use of Machine Learning and Text Classification

Text mining is a method for extracting useful information from unstructured data through the identification and exploration of large amounts of text. It is a valuable support tool for organisations. It enables a greater understanding and identification of relevant business insights from text. Critically it identifies connections between information within texts that would otherwise go unnoticed. Its application is prevalent in areas such as marketing and political science however, until recently it has been largely overlooked within economics. Central banks are beginning to investigate the benefits of machine learning, sentiment analysis and natural language processing in light of the large amount of unstructured data available to them. This includes news articles, financial contracts, social media, supervisory and market intelligence and regulatory reports. In this research paper a dataset consisting of regulatory required Solvency and Financial Condition Reports (SFCR) is analysed to determine if machine learning and text classification can assist assessing the completeness of SFCRs. The completeness is determined by whether or not the document adheres to nine European guidelines. Natural language processing and supervised machine learning techniques are implemented to classify pages of the report as belonging to one of the guidelines

Some Alternative Perspectives on Macroeconomic Theory and Some Policy Implications

An initial version of this paper was presented at a meeting of the Euro50 group in Paris on 20, November, 2009. It has benefitted from comments by David Laidler and Axel Leijonhufvud, neither of whom necessarily agree with all of its contents.

Longevity Risk and Capital Markets: The 2015-16 Update

International audienc

Some alternative perspectives on macroeconomic theory and some policy implications

The macroeconomic theories and models favoured by academics, as well as those used more commonly by policymakers, effectively rule out by assumption economic and financial crises of the sort we are living through. In particular, the longer run dangers posed by the rapid expansion of credit and resulting private sector balance sheet developments were inadequately appreciated. As a result, the current crisis was neither anticipated nor prepared for, and the crisis was also less well managed than it might have been. At the level of macroeconomic theory and modelling, this experience suggests that basic Keynesian insights need to be complemented by some insights from the Austrian school as well as those of Minsky. Demand factors are important, but so too are supply side and financial considerations. Such a synthesis provides a reasonable explanation of the crisis and points to some of the difficulties likely to be faced in emerging from it. As for the policy implications in current circumstances, it needs to be better recognized that policies with positive short run effects can have negative effects over a longer time period. If, as a result, fiscal and monetary expansion have now reached their limits in some countries, supply side policies must be given greater emphasis. These would include measures to encourage investment, both private and public, as well as other structural measures to raise the potential growth rate of the economy. Such measures, along with more decisive efforts to reduce the "headwinds" of over indebtedness, should with time provide the foundations for a sustainable economic recovery.Global financial crisis ; Business cycles - Econometric models ; Financial markets ; Macroeconomics - Econometric models ; Supply-side economics ; Monetary policy ; Fiscal policy

Longevity Risk and Capital Markets: The 2018-19 Update

This Special Issue of the Annals of Actuarial Science contains 12 contributions to the academic literature all dealing with longevity risk and capital markets. Draft versions of the papers were presented at Longevity 14: The Fourteenth International Longevity Risk and Capital Markets Solutions Conference that was held in Amsterdam on 20-21 September 2018. It was hosted by the Pensions Institute at Cass Business School and the Netspar Network for Studies on Pensions, Ageing and Retirement

Shareholder Activism : A Driver or an Obstacle to Sustainable Value Creation?

During the last decade, discussion on shareholder activism concentrated on hedge funds, some seeing them as agents for passive institutional shareholders, bridging the separation of ownership and control, others believing their short-term value-maximization interests differing fundamentally from those of other shareholders. Some have seen hopes for long-term activism in institutional shareholders like pension funds. In the European Union, activism is seen positively, encouraging proposals to enhance shareholders’ rights against the boards’ discretion. The purpose of this chapter is to focus on institutional investor activism and its impact on both their ultimate beneficiaries and their target companies, and how investors could be incentivised to more sustainable behaviour in their activism. Albeit the focus is on the European Union, institutional investors are global. A broader perspective including North America and Asia is therefore taken. The most important impact of institutional activism is arguably normative, causing changes in corporate governance. Specific attention is therefore given to governance questions. Keywords: company; shareholders; activism; shareholder activism; institutional investors; corporate governance; European UnionPeer reviewe

Transformation of China's State Commercial Sector Governance: A Case Study of China’s Largest Insurance Company, China Life

This thesis seeks to detail and advance path-based explanations for the changing character and conduct of Chinese state sector governance at both evolving national and current leading firm level. The ruling Chinese party-state has expressed concern about how governance failings lower operational efficiency in the state sector over three decades while continuing to devise and implement different reforms in the process. However, empirical research often suggests that its gradualist or incremental approach to reform can also result in a mosaic of different transplanted governance institutions which are not necessarily fully or immediately compatible with China’s own unique context. This thesis specifically examines the transformative dynamics of China’s state sector governance system through the prism of path based theory in order to provide a more holistic and in-depth understanding of how that context and leading Chinese actors’ own conduct both exert salient influences over governance practices. It uses a mixed-method strategy at both national and firm levels to derive a deeper and more holistic understanding than any one single method alone might do. Overall it finds governance reform to be characterized by a relatively unsynchronised and challengeable process of policy making and implementation which allows for some degree of flexibility and openness. Its more detailed findings also question path dependency type explanations' emphasis upon continued institutional stability and reproduction. These findings further suggest that the actual reform is not necessarily the collective and consensual quest for ever high levels of efficiency which certain financial economists typically assume. It can also depend upon the outcome of other competing pressures between increased marketization and competition on one hand, and different demands for maintaining extant governance structures and vested interests on the other. The former are no less legitimate and, in principle, urgent concerns for both policy makers and other leading stakeholders than the latter. Embedded characteristics cannot just be reduced to efficiency-technocratic considerations for inducing different competitive performance when these neglect how redistributive an economic governance system can be, and also the essentially mediated efficacy of certain transplanted mechanisms. Much of the convergence-divergence debate regarding national economic governance systems has nevertheless been conceived in efficiency and competition terms alone. However, this thesis suggests that the promulgation and transplantation of SSG reform policies needs to take the specific country context into greater consideration if it is to be both more meaningful and effective