2 research outputs found
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Risk management in reinsurance
Interest in risk management has increased in recent years. many studies concerning risk and insurance theory have appeared. These have been aimed at defining the risks and finding the most suitable methods to control them and their effects as well as minimizing the costs. The interest of the reinsurer in risk management, and his success in limiting his risks and hence in increasing his insuring capacity and achieving a balance in his portfolio is an important starting point to overcome many of the problems which confront the insurance and reinsurance markets. The capacity of the different insurance corporations and the markets as a whole depends on the capacity of the reinsurance markets to provide the essential covers for risks which are accepted by the insurance companies. The need to increase the capacity is not restricted only to the developing insurance markets, but it has become more important for the developed markets because of the nature of risks resulting from scientific advancement and changes in the economic, financial and social environment of insurance enterprises. This study concerns the general framework of risk theory, risk definition, classification and measurement and of methods of risk management in order to allow the theory and its applications to be introduced into the various fields which are beset by risk. The study reviews the division and analyses of the risks which are confronted by the reinsurer, whether they are related to each type of primary risk or to reinsurance risk or to the political, social and economic elements in the environment. It also studies and analyses the methods which are already used,, and those which can be used by the reinsurer in managing the risks which confront him. The study concentrates on the technical aspects of the contractual and management devices as well as the underwriting and retention decisions as the most effective methods of managing these risks. This is done by studying the factors which affect the decisions as indicated by a quantitative survey by the researcher.
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Let's Keep this Private: The Growing Weight of Evidence Behind Improving M&A Returns
It’s different this time’… is certainly a phrase that’s been used for subjects ranging from the 2000 equity market valuations to the prospects of England at the football World Cup. But unlike in mathematical proof or scientific experimentation, finance theories are not fixed in their validity. That validity can have a time limit.
And in that light, historically viewed as being negative for the acquiring company, M&A acquisitions are now seen as being more positive by many who use more recent data, despite there being those who stick fast to the earlier, albeit out-dated, research. But is this actually the case?
First, what could be the explanation for improving returns being observed for acquirers in M&A?
1. Maybe corporates are learning and executing better (not the focus of this report but we touch on a couple of potential explanations at the end)?
2. A mix effect. Corporates are doing the ‘right’ sort of deals
3. Has analysis improved to pick up the value creation?
We set out to investigate the premise and the possible reasons for the change, with a particular emphasis on success rates of acquisitions of unlisted companies (referred to here as Private deals) versus those of listed companies (referred to as Public deals) and the changes in success observed before and after the bubble of 2000. The basis of our report is a meta-analysis of 86 studies in the field.
The latter two explanations above are clearly valid in our view of the literature. The connection between the two explanations is Private deals -- and that is the focus of this report. We have found an increase in the prevalence of Private deals, from 66% of acquisitions by listed firms in the period 1984-1999 (inclusive) to 78% in the period 2000-2015.
Combine that fact with more analysis of private deal making and the dramatic (positive) results for Private deals that are shown in this report and in our opinion you are a long way to an explanation.
Private deals don’t have to be small as they can be transformational. In what is now branded one of the top 15 tech acquisitions of all time, Google bought private company Applied Semantics for 2.6bn. It was sold for $8.5bn in 2011