On the management of life insurance company risk by strategic choice of product mix, investment strategy and surplus appropriation schemes
نویسندگان
چکیده
The aim of this paper is to analyze the impact of management’s strategic choice of asset and liability composition in life insurance on shortfall risk and the shareholders’ fair risk charge. In contrast to previous work, we focus on the effectiveness of management decisions regarding the product mix and the riskiness of the asset side under different surplus appropriation schemes.We propose amodel setting that comprises temporary life annuities and endowment insurance contracts. Our numerical results show that the effectiveness ofmanagement decisions in regard to risk reduction strongly depends on the surplus appropriation scheme offered to the customer and their impact on guaranteed benefit payments, which thus presents an important control variable for the insurer. © 2014 Elsevier B.V. All rights reserved.
منابع مشابه
Marketing Strategy Evaluation by Integrating Dynamic Systems Modeling and Network Data Envelopment Analysis
Nowadays, the service industries play an essential role in the economic development of countries, and among the various fields of insurance, life insurance is of particular importance because it covers its cover directly to humans. Increased competition in the insurance industry has led managers to seek marketing strategies that, in addition to increasing insurance sales, reduce costs and gain ...
متن کاملIDENTIFICATION AND PRIORITIZATION OF ENVIRONMENTAL FACTORS AFFECTING THE IMPLEMENTATION OF ORGANIZATIONAL STRATEGIES IN THE INSURANCE INDUSTRY (A CASE STUDY OF ASIA INSURANCE)
A company or organization requires special unique strategies to achieve organizational goals which not only do bring about macro-and long-term goals, but also create competitive status for the organization. However, developing different strategies will not guarantee the organization’s success, but the implementation of strategy is the most important step in the entire life of strategic managem...
متن کاملTesting for Asymmetric Information in Automobile Insurance Market an Iranian Insurance Company
The presence of asymmetric information is an important source of efficiency loss for insurance companies and could reduce profitability. In this paper, we test the conditional independence of coverage choice and risk, where “conditional” means conditional on all variables observed by the insurer. We use two parametric methods: a pair of probits and a bivariate probit model. The data includes al...
متن کاملA model for illustrating the effective factors of strategic behavior (Case study: Social insurance company of Tehran)
Achieving the organizational objectives needs employees’ behavior and their collaboration with management. Strategic behavior-driven is depend on different factors. The aim of this article is to determine the impact of factors on strategic behavior-driven. A conceptual model was developed and tested on a survey in Social Insurance Company of Tehran which employees’ participated. Data collected ...
متن کاملPolicy Options to Reduce Fragmentation in the Pooling of Health Insurance Funds in Iran
There are fragmentations in Iran’s health insurance system. Multiple health insurance funds exist, without adequate provisions for transfer or redistribution of cross subsidy among them. Multiple risk pools, including several private secondary insurance schemes, have resulted in a tiered health insurance system with inequitable benefit packages for different segments of the population. Also fra...
متن کامل