Risk shifting is a well-known agency problem in corporate finance which also exists between policyholders and shareholders of insurance companies. Shareholders engage in excessive risk taking at the expense of policyholders who, in turn, are less willing to pay for insurance coverage. Solvency regulation addresses this incentive problem by restricting the set of investment strategies and premiu...

Life settlements provide the possibility for individuals to convert their life insurance policies into cash in a secondary market transaction. Hence, this additional option is welcome from the current policyholders’ point of view, but the reasons for the attractiveness to financial investors as well as the equilibrium impacts on life insurers and future policyholders are not immediate clear. Th...

The insurance industry needs to be regulated to protect policyholders. This is the main objective of the Solvency II directive – the new insurance regulations for the European Economic Area. In short, it requires insurance companies to act responsibly with the money they have been entrusted with. It is estimated that implementing Solvency II will cost 2-3 billion Euro. It has the potential to c...

Since insuring agricultural products is one of the effective instruments for risk management in agricultural sector, it can reduce risk avoidance among farmers and increase their competence in using production factors and, consequently, increases their inclination towards investment in agricultural sectors. The purpose of the current study was to investigate the factors influencing policyholder...

The purpose of this paper is to conduct a market-consistent valuation life insurance participating liabilities sold population partially heterogeneous customers under the joint impact biometric and financial risk. In particular, heterogeneity between groups policyholders stems from their offered minimum interest rate guarantees contract maturities. We analyse effects these features on company’s...

This study aims to examine the legal protection provided customers of life insurance policyholders in Bumi Putera, focusing on product transparency, fair and fast claim procedures, as well appeal lawsuit procedures. The method used field research with a qualitative approach through in-depth interviews related parties Putera. data collection techniques were document studies interviews. collected...

This paper presents applications of stochastic control theory in determining an insurer's optimal reinsurance and rating policy. Optimality is defined by means of variances of such variables as underwriting result of the insurer, solvency margins of the insurer and reinsurer and the premiums paid by policyholders.