Financing and the demand for corporate insurance

In this paper we examine the insurance decision of a firm with private information regarding its cash flows and insurable losses. We show that, even in the absence of bankruptcy costs and information production by insurers, the firm's attempts to hedge its information risk can induce it to demand insurance. If higher operating revenues are accompanied by a lower insurance risk, the firm will choose to self-insure. In contrast, if higher operating revenues are accompanied by a higher insurance risk, the firm will demand insurance. In fact, if its insurable losses are relatively small, the firm will fully insure its losses. Further, if there exists considerable uncertainty regarding the firm's insurance risk, the level of coverage demanded by the firm is dependent on its private information, with higher levels of coverage signaling favorable information regarding the firm's future operations.     

A rating model for loss of profits insurance

Abstract

In this paper we present a rating model for loss of profits insurance for a production system consisting of n production units. Explicit expressions for the company's long run expected average claims expenditures are derived. A numerical example is given.     

The effect of overconfidence on insurance demand

The Geneva Risk and Insurance Review - Sandroni and Squintani (Am Econ Rev 97(5):1994–2004, 2007) argue that in the presence of overconfident agents, the findings of Rothschild and Stiglitz...     

Income heterogeneity and index insurance demand

Weather index insurance as a tool to insure the income of agriculturally active households has triggered extensive discussions in the literature. Despite the convincing theoretical argumentation, the demand for these products stays behind expectations. Several studies revealed effects impacting the demand for index insurance, such as liquidity constraints, basis risk, lack of understanding and trust in insurers and products alike. This paper takes a different perspective and hypothesizes that low demand is due to heterogeneous risk exposure towards weather variability among potential insured. The paper tests the impact of income heterogeneity as a measure of risk exposure on insurance demand and finds that risk exposure negatively affects insurance demand. In order to increase demand, it is concluded that product design should emphasize more the importance of income risk composition and exposure of potentially insured.     

Corporate demand for insurance: Some empirical and theoretical results

While risk aversion explains individual consumer demand for insurance, it does not explain the corporate demand for insurance. Studies have suggested a variety of incentives that motivate corporations to purchase insurance. We find that the primary motivation for corporate insurance purchases can be explained by the bondholder's me-first rule. In return for insurance, bondholders will charge stockholders a lower cost of debt, thereby increasing firm value.     

A pedagogical note on Baumol's gain-confidence limit criterion for portfolio selection and the probability of ruin

The Baumol gain-confidence limit concept for selecting the set of efficient portfolios is commonly used, probably because of its intuitive relationships to the problem of ruin. This note shows the differences between Baumol's idea and the ruin constraint.     

中国城镇失业保险的供求矛盾及对策研究

失业保险是指个人在失去工作或等待就业期间能从政府或社会得到保证基本生活需要的物质帮助。我国的失业保险制度从无到有逐渐发展壮大到今天,虽然已初步形成体系,但伴随着我国失业人口的与日俱增,现行的失业保险供给远远满足不了实际需求,在政府资金缺口的约束下,这一供求矛盾还将继续存在甚至有扩大的趋势。将失业保险制度的创新与促进就业的政策措施相结合,对于解决城镇失业保险的供求矛盾,实现标本兼治有着重要的意义。     

Adverse selection in the annuity market with sequential and simultaneous insurance demand

This paper investigates the effect of adverse selection on the private annuity market in a model with two periods of retirement and two types of individuals, who differ in their life expectancy. In order to introduce the existence of time-limited pension insurance, we consider a model where for each period of retirement separate contracts can be purchased. Demand for the two periods can be decided sequentially or simultaneously. We show that only a situation where all risk types choose sequential contracts is an equilibrium and that this outcome is favourable for the long-living, but is unfavourable for the short-living individuals. JEL Classification D82 · D91 · G22     

The cost of operational risk loss insurance

Using the Algo FIRST operational risk database, this paper computes the cost of operational risk loss insurance for a sample of banks over a 1-year horizon. The estimated cost of 1-year operational risk loss insurance for an average bank is 1.24% as a percentage of firm value on December 31, 2006, while an average AA bank is 0.24%. These estimates far exceed the typical 1-year default insurance premiums as reflected in market CDS rates for similarly rated banks. These insurance premiums confirm the economic importance of operational risk in the management of financial institutions.     

财产保险防灾减损技术研究

一、研究目标和研究内容防灾减损工作是保险业务的重要组成部分。做好防灾减损工作,对保险企业提高自身效益具有十分重要的意义。为了减少自然灾害对财产保险造成的损失,国内外不少保险公司都在不同程度上开展了财产保险防灾减损技术研究。财产保险防灾减损技术研究目标为:①根据保险业当前和未来财产保险防灾减损的需要,建立管理系统模型,提高保险业在防灾减损方面的科学决策能力;②综合利用遥感、地理信息系统和全球定位系统集成方法,提高灾害预测与评估研究的科学性和可靠性;③结合不同地域自然环境的差异性和自然灾害的特点,构建财产保…     

A comment on the foundations of the precautionary demand for money

The model of the precautionary demand for money presented by Plessner and Reid (1980) is critically examined. It is shown that households derive no benefit from unscheduled consumption (in the model in question) and will therefore choose not to hold precautionary balances. Positive balances were obtained only by ensuring that scheduled consumption was chosen sub-optimally. However, this note confirms the Plessner-Reid hypothesis by explicitly modelling the benefits of unscheduled consumption.     

On the probability of ruin in the collective risk theory for insurance enterprises with oly negative risk sums

Abstract

1. The determination of the probability that an insurance company once in the future will be brought to ruin is a problem of great interest in insurance mathematics. If we know this probability, it does not only give us a possibility to estimate the stability of the insurance company, but we may also decide which precautions, in the form of f. ex. reinsurance and loading of the premiums, should be taken in order to make the probability of ruin so small that in practice no ruin is to be feared.     

深圳车险公估市场调研报告

车险公估作为深圳公估业的重要组成部分,为深圳保险业服务经济社会发展做出了积极贡献。不仅在保险理赔、风险评估领域发挥着重要的中介作用,而且为促进公估业的经济增长注入了动力。但是进入2009年后,深圳车险公估总体呈现发展后劲不足的态势。为进一步摸清深圳车险公估市场发展现状,巩固深圳保险公估之都的地位,深圳保监局对深圳车险公估市场展开深入研究,分析目前车险公估发展现状和存在的问题,并对深圳车险公估的可持续发展问题提出相关建议。     

资产周期特性与保险公司资产配置策略

在竞争激烈的保险市场上,作为盈利的两大支柱之一,保险公司资产管理的能力日趋重要,而保险公司资产配置是保险资产管理的核心,其研究意义就显得尤为重要。本文首先给出保险资产配置的意义与总体原则,然后从保险资金的来源和特性入手,在详细分析了美国、中国不同经济周期和市场周期下大类资产风险收益特性的基础之上,给出保险公司资产负债管理和资产配置的战略决策建议。     

保险行业中远程核损系统的开发与应用

近年来，随着保险主体的增多，保险公司之间的竞争日益加剧。如何在激烈的竞争中立于不败之地，这取决于公司经营效益的实现效率，即如何通过消耗较少的时间和人力实现效益的最大化。管理水平的提高，必然会带来经营效益的增长。信息技术作为企业管理中不可或缺的手段之一，正在各家保险公司的发展中扮演着愈加重要的角色。[第一段]     

保险公司资产组合与最优投资比例研究

保险公司收益主要来源于承保利润和投资收益,其中承保利润受政策变动、市场条件等外部环境的影响较大,而投资收益则更多地取决于保险公司的投资能力,因此保险公司如何构建资产组合、如何确定最优投资比例就是获取投资收益最大化的重要因素。本文通过理论推导得出了保险公司的资产组合模型并运用非线性规划求解出最优投资比例,进而根据保险公司的投资数据进行了实证研究,为我国保险公司的资产组合及最优投资比例提供了一个可借鉴的思路。     

A ruin problem for the insurance of expanding portfolios

Abstract

The purpose of this short note is to demonstrate the power of very straightforward branching process methods outside their traditional realm of application. We shall consider an insurance scheme where claims do not necessarily arise as a stationary process. Indeed, the number of policy-holders is changing so that each of them generates a random number of new insurants. Each one of these make claims of random size at random instants, independently but with the same distribution for different individuals. Premiums are supposed equal for all policy-holders. It is proved that there is, for an expanding portfolio, only one premium size which is fair in the sense that if the premium is larger than that, then the profit of the insurer grows infinite with time, whereas a smaller premium leads to his inevitable ruin. (Branching process models for the development of the portfolio may seem unrealistic. However, they do include the classical theory, where independent and identically distributed claims arise at the points of a renewal process.)     

A note on the forward measure

For a Markov process , the forward measure over the time interval is defined by the Radon-Nikodym derivative , where is a given non-negative function and is the normalizing constant. In this paper, the law of under the forward measure is identified when is a diffusion process or, more generally, a continuous-path Markov process.