On accounting standards and fair valuation of life insurance and pension liabilities

The actuarial profession is increasingly teaming up with financial economists for a fruitful cooperation on the proper valuation of life insurance and pension (L&P) liabilities. This has been a natural consequence of a recent sharply increased focus on market values in financial reports of L&P companies from regulators, standard setters, the financial press, stakeholders, and others with an interest in the L&P business.

This article provides a financial economist's point of view on recent developments in relation to the fair valuation of L&P liabilities. The role of accounting standards and the background for the international harmonization in this field are first discussed. We then review and explain the concept of fair value and provide a general view on appropriate techniques for estimating fair values of L&P liabilities in accordance with the definition of the concept. The paper also contains a section which briefly reviews recent and quite innovative regulatory initiatives in relation to market value reporting in the Danish market for life and pension insurance.     

农业可持续发展与土地资源优化配置

农村土地贵源的优化配置是农业可持续发展的核心。从配置原则的选择、配置主体的转换与配置机制的再造3个层面,结合我国农村改革与发展实际,分析了市场经济条件下的农村土地资源配置,这也是解决“三农”问题的重要目标选择。     

Firm-specific cost savings and market power

Summary. We report a policy experiment that illustrates a potential problem of using historical pass-through rates as a means of predicting the competitive consequences of projected firm-specific cost savings in antitrust contexts, particularly in merger analysis. The effects of cost savings on welfare can vary vastly, depending on how the savings affect the industry supply schedule. In a capacity-constrained price-setting oligopoly, we observe that cost savings can overwhelm behaviorally salient market power incentives when the savings affect marginal (high cost) units. However, cost savings of the same magnitude on an infra-marginal unit leave market power unchanged.     

Mergers and acquisitions in the US property-liability insurance industry: Productivity and efficiency effects

This paper analyzes the productivity and efficiency effects of mergers and acquisitions (M&As) in the US property-liability insurance industry during the period 1994–2003 using data envelopment analysis (DEA) and Malmquist productivity indices. We seek to determine whether M&As are value-enhancing, value-neutral, or value-reducing. The analysis examines efficiency and productivity change for acquirers, acquisition targets, and non-M&A firms. We also examine the firm characteristics associated with becoming an acquirer or target through probit analysis. The results provide evidence that M&As in property-liability insurance were value-enhancing. Acquiring firms achieved more revenue efficiency gains than non-acquiring firms, and target firms experienced greater cost and allocative efficiency growth than non-targets. Factors other than efficiency enhancement are important factors in property-liability insurer M&As. Financially vulnerable insurers are significantly more likely to become acquisition targets, consistent with corporate control theory, and we also find evidence that M&As are motivated to achieve diversification. However, there is no evidence that scale economies played an important role in the insurance M&A wave.     

Hospital Numerical Flexibility and Nurse Economic Security in China and India

This article contrasts the flexibility of Chinese and Indian urban hospitals and the security of nurses. The study draws on a survey of 55 urban hospitals, and finds that national context generates different flexibility–security outcomes even when workers with similar skills are considered. Our findings support claims that China is constructing a flexibility–security regime that aims to promote both security and flexibility, and that India remains attached to employer‐based social protection, but challenges the claim that economic growth is higher in China because India's employers have relatively less capacity to utilize labour‐time as they wish.     

Breastfeeding versus infant formula: the Kenyan case

An Infant Feeding Practices Study (IFPS) in 1982 in Kenya, which included a cross-sectional survey of a weighted sample of 980 low and middle income Nairobi mothers who had given birth in the previous 18 months, found that most women breastfeed their infants for long periods, but many introduce alternate feeding, especially infant formula, in the 1st 4 months (86 and 50% of the infants were breastfed at 6 and 15 months respectively, but 50% of the 2 month-olds and 63% of the 4 month-olds were receiving substitutes, mostly formula). This is done largely out of the belief that infant formula is an additional health benefit. A workshop to discuss the findings of the IFPS and other available data, and to make policy recommendations urged the adoption of a policy of protection, support and promotion of breastfeeding. Since breastfeeding is already widely prevalent in Kenya, protection of breastfeeding should receive the 1st priority in policy related to infant feeding. Attention should be directed at at least 2 influences which help undermine breastfeeding: widespread availability and promotion of breast milk substitutes. Support for breastfeeding is viewed as the 2nd policy priority. Situations where support can play a helpful role are, women's paid employment outside the home, hospital practices, maternal morbidity, and difficulties in breastfeeding. Since promotion is the least cost effective of the 3 options, and most Kenyan women are already motivated to breastfeed, this should be the last priority. Promotion includes reeduction of mothers to make them better aware of the benefits of breastfeeding. The workshop recommended the dissemination of appropriate information, consisting of standarized messages based on clearcut guidelines, using mass media techniques.