Enterprise risk management in financial groups: analysis of risk concentration and default risk

In financial groups, enterprise risk management is becoming increasingly important in controlling and managing the different independent legal entities in the group. The aim of this paper is to assess and relate risk concentration and joint default probabilities of the group’s legal entities in order to achieve a more comprehensive picture of a financial group’s risk situation. We further examine the impact of the type of dependence structure on results by comparing linear and nonlinear dependencies using different copula concepts under certain distributional assumptions. Our results show that even if financial groups with different dependence structures do have the same risk concentration factor, joint default probabilities of different sets of subsidiaries can vary tremendously.

Risk assessment of surplus appropriation schemes in participating life insurance

The aim of this paper is to analyze a life insurance company’s risk exposure with respect to different surplus appropriation schemes in participating life insurance. In this regard, three surplus appropriation schemes are considered, including the bonus system, the interest-bearing accumulation, and the system of shortening the contract term. We further examine an insurance company that offers all three schemes, i.e. each system is used for one third of the policyholders. Focus is laid on the effect of different asset portfolios and shocks to mortality on the insurer’s risk situation with respect to the policyholder’s age level at contract inception.     

Using participatory rural appraisal and participatory research and extension in a post-independence environment: a case from East Timor

A participatory rural appraisal (PRA) conducted in East Timor in 2004 as part of an agricultural development project provided the basis for a number of community-based participatory extension initiatives. The PRA involved several communities throughout a watershed and also served as a training exercise for local agriculture ministry staff. Despite the poverty of many of the communities involved, and in contrast to published literature on the local agricultural situation, farmers clearly expressed their need for more marketable crops and alternative sources of livelihoods. Their desires contrasted with the project's initial assumption that the major need was for increased production of staple crops to alleviate food scarcity. The project consequently branched out from concentrating on basic agronomy of staple crops into developing marketable crops, improving livestock production and facilitating development of a local business. Farmers' groups were set up to allow farmers to develop their own agricultural enterprises. Some ministry staff who participated in the project welcomed the opportunity to move from the traditional authoritarian extension system set up under Indonesian colonial rule to a more collegial and educational system. The breakdown of institutions and lines of authority following independence may create new opportunities for participatory development in newly independent states.     

Management “flavours of the month”: their role in managers' lives

Existing analyses and critiques of the succession of management fads and fashions entering managerial discourse and activities are complemented and developed by drawing on participant observation research carried out in an organization utilizing a variety of “packaged innovations”. It is shown that what are sometimes mocked as “flavours of the month” (FOMs) play a role in the double-controlproblem faced by all managers: the problem of managing their personal identities, careers and understandings at the same time as contributing to the overall control of the organization in which they are managers. Managers in the organization studied are shown generally to be critical of the “flavour of the month effect” but there is nevertheless an equivocality about how such ideas and practices can function.