Forecasting the Fragility of the Banking and Insurance Sector

This paper considers the issue of forecasting financial fragility of banks and insurances using a panel data set of performance indicators, namely distance-to- default, taking unobserved common factors into account. We show that common factors are important in the performance of banks and insurances, analyze the influences of a number of observable factors on banking and insurance performance, and evaluate the forecasts from our model. We find that taking unobserved common factors into account reduces the the root mean square forecasts error of firm specific forecasts by up to 11% and of system forecasts by up to 29% relative to a model based only on observed variables. Estimates of the factor loadings suggest that the correlation of financial institutions has been relatively stable over the forecast period.Financial stability, financial linkages, banking, insurances, unobserved common factors, forecasting

Reliability margin-sine-die condition for the performance of insurance companies

In the European Union there are rules regarding the determination of the reliability margin and warranty funds. Thus authorized insurers on general insurances and/or life insurances by rightful institutions from EU member countries, have to permanently have an available reliability margin according to the activity they carry on. The available reliability margin will be at least equal to the minimum reliability margin. Romanian insurers estimate the available reliability margin, as well as the minimum reliability margin, from the regulations issued by the Insurance Surveillance Committee (ISC).reliability margin, profitability, safety fund, solvency, Basel Agreement

SaferDrive: an NLG-based Behaviour Change Support System for Drivers

Despite the long history of Natural Language Generation (NLG) research, the potential for influencing real world behaviour through automatically generated texts has not received much attention. In this paper, we present SaferDrive, a behaviour change support system that uses NLG and telematic data in order to create weekly textual feedback for automobile drivers, which is delivered through a smartphone application. Usage-based car insurances use sensors to track driver behaviour. Although the data collected by such insurances could provide detailed feedback about the driving style, they are typically withheld from the driver and used only to calculate insurance premiums. SaferDrive instead provides detailed textual feedback about the driving style, with the intent to help drivers improve their driving habits. We evaluate the system with real drivers and report that the textual feedback generated by our system does have a positive influence on driving habits, especially with regard to speeding

The introduction of sickness insurance in Spain in the first decades of the Franco dictatorship (1939-1962)

[Abstract:]Using new statistical data on financing, coverage and economic and health care provisions, this article analyses how sickness insurance was introduced, managed and extended in Spain, under the Franco dictatorship, between 1939 and 1962. This article highlights how the dictatorship accelerated its implementation for political motives and this resulted in a failure of the system due to the lack of public financing and the high pharmaceutical, medical and infrastructure cost

Agricultural insurances in Romania: present and future aspects

Concern for risks that stifle investment and contribute to vulnerability of the rural poor is a driving force behind various types of agricultural insurance. Insuring small-scale farmers against crop losses to adverse weather or other hazards has attracted public sector involvement in the provision of agricultural insurance in many countries among which Romania. With few exceptions, such interventions have encountered severe problems owing to high administrative costs, moral hazard, adverse selection etc. Government interventions should be aimed at improving the accessibility and quality of private sector insurance. This will require the establishment of a framework for responding to severe systemic events affecting agricultural production, and establishing an appropriate regulatory environment to foster private sector innovation and investment in services for less catastrophic events. Thus, in this item we tried to illustrate some elemental incident to appearances agricultural insurances in Romania.agricultural insurances, moral hazard, adverse selection, weather insurance, weather derivative

Equity-linked insurances and guaranteed annuity options

We consider here term and whole-life cases of the equity-linked life insurance(ELLI), and the guaranteed annuity option (GAO). We present a financial instrument which is a combination of ELLI and GAO in a stochastic interest rate framework.equity-linked life insurance; guaranteed annuity option; geometric Brownian motion; Ornstein-Uhlenbeck process; Monte Carlo simulations

Domestic insurers in Poland and the global crisis

The article contains the analysis of the impact of global crisis on Polish insurance sector. The main areas of the crisis impact on the activity of Polish insurance companies has so far been the change in the assets value and the associated decline in the profitability of investment activity. The danger arising from the economic downturn has not been realized so far in the Polish insurance sector. Although the premium written is high, the structure of the portfolio in life insurances is changing. In 2008, however, a significant retreat from saving insurance policies with capital funds in the direction of structured products is observed. A significant increase in premiums written resulted in a good financial situation of Polish insurance companies. Despite the turmoil in financial markets it also seems that solvency of Polish insurance sector is unthreatened as measured by statutory ratios.insurance companies, Polish insurance market, global crisis

IMPROVEMENT OF LIFE INSURANCE-RELATED ACCOUNTING OPERATIONS WITHIN THE NEW ECONOMY

This paper outlines the life insurance-related accounting operations, in consideration to the harmonization of the Romanian legislation with the International Financial Reporting Standards. The main accounting operations specific to the life insurance sector include: accounting of revenues and expenses derived from life insurance operations (recording the premiums written, recording the payment of insurance premiums, termination of insurance policy, recording the compensation expenses), accounting of operations related to the setting up and using the technical reserves for life insurance (general principles, accounting of premium reserves, accounting of loss reserve, accounting of the reserve for benefits and discounts, accounting of mathematical reserve, accounting of other life insurance-related technical reserves).revenues and expenses; life insurance; technical reserves for life insurance; reported/not reported loss reserve; reserve for benefits and discounts; mathematical reserve