Insurance Markets and Companies

Journal Information
ISSN / EISSN : 26163551 / 25229591
Current Publisher: LLC CPC Business Perspectives (10.21511)
Total articles ≅ 19
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DOAJ
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Inna Shkolnyk, Eugenia Bondarenko, Ievgen Balatskyi
Insurance Markets and Companies, Volume 10, pp 26-35; doi:10.21511/ins.10(1).2019.03

Abstract:The Ukrainian stock market is rated as an emerging market, which is characterized by high profitability and higher risk level as compared to developed economies. Securities transactions on the Ukrainian stock market are accompanied by stable uncertainties. Moreover, insurance is the most effective way to reduce financial risks and their negative effects. Given the current economic and political instability, financial risk insurance can ensure the economic performance of business entities and stimulate their further economic development. Financial risk insurance is the liability insurance in its nature, but its terms are often included in property insurance. This insurance sector has considerable facilities, which require activation of new insurance products that will be able to protect individual and institutional investors. Insurance and stock markets are direct competitors for limited investor resources, including strategic sources such as temporarily free institutional investor funds and household savings. In general, although there is a significant interaction between the insurance and other financial markets in Ukraine, it is hardly realized at all, unlike foreign economies, where it is used to its maximum. With the development of the insurance culture of the population and insurance in general, the relevance of insurance services in a high-risk segment like the stock market increases. The article harmonizes types of financial risks arising on the stock market with the methods of their leveling (insurance, hedging, diversification, etc.), determines the risk factors of the investor in the stock market, and specifies the professional risks of financial institutions. For the Ukrainian stock market participants, the use of two types of insurance coverage, namely, Bankers Blanket Bond and Financial Institution Professional Indemnity, is proposed.
Donatella Porrini, Francesco De Masi, Dipartimento Di Scienze Dell'economia Associate Professor, Dipartimento Di Scienze Dell'Economia Ph.D. Student
Insurance Markets and Companies, Volume 10, pp 9-25; doi:10.21511/ins.10(1).2019.02

Abstract:The aim of this article is to analyze the role of insurance for the coverage of damages deriving from natural disasters, focusing on the specific case of the Italian cathedrals. In this sense, a survey was conducted among the Italian Dioceses asking them to complete a questionnaire, through which the data useful for the analysis of the spread of insurance contracts and for other qualitative and quantitative elements linked to the decisional process of being insured were collected. The achieved coverage is equal to 29.02% of the Italian Dioceses, corresponding to 65 answers of a total of 224 contacts. In particular, the questionnaires investigate insurance presence, perception and awareness, willingness to pay and future prospects. An in-depth analysis about all the data deriving from the survey is provided, trying to compare some results and finally some considerations are presented on future research perspectives. What emerges is in some aspects surprising, because it allows to identify a significant financial culture and knowledge of the importance covered by insurance in the governance of disaster risk: for 62% of the cases analyzed, they have already underwritten this type of contract.
Elinor Mualem, Abraham Zaks
Insurance Markets and Companies, Volume 10, pp 1-8; doi:10.21511/ins.10(1).2019.01

Olena Prymostka
Insurance Markets and Companies, Volume 9, pp 70-78; doi:10.21511/ins.09(1).2018.06

Abstract:The research is aimed to evaluate the internet marketing strategies in of life insurance companies in Ukraine. The insurance service in the time of digitalization faces scenarios of implementation in the marketing strategy on-line component. The main challenge for Ukrainian life insurance companies comparatively with the world practice is non-obligatory status of such kind of insurance contracts. So, on the one hand, costs of operation, regulatory pressures and inflexible technology infrastructure are increasing, and, on the other hand, economic recession does not allow to increase the number of insured persons, premiums and profit growth.Sector of financial services is characterized by an increase in the level of competition, life insurance compelled to compete with pensions funds, banks and other financial institutions in order to defend their market share. Insurance companies marketing strategy determines how an insurer can best achieve its goals and objectives, keep existing customers and attract new ones with minimal costs.Keeping all the above problems around the study would attempt to study all the factors that contributed to the effective marketing strategies. This paper presents different marketing strategies that are taken up in life insurance services keeping in view external and internal environment of the company.
Aymeric Kalife, Gabriela López Ruiz, Saad Mouti, Xiaolu Tan, Assistant Professor at Ceremade University of Paris Dauphine
Insurance Markets and Companies, Volume 9, pp 41-69; doi:10.21511/ins.09(1).2018.05

Abstract:Guaranteed Minimum Income benefit are variable annuities contract, which offer the policyholder the possibility to con- vert the guarantee level into an annuities income for life. This paper focuses on the optimal customer behavior assuming the maximization of the discounted expected future cash flows over the full life of the contract duration. Using convenient scaling properties of the contract value enables to reduce the complexity (dimension) of the problem and to characterize the policyholder’s decision as a function of the contract moneyness across four main choices: zero withdrawals, guaranteed withdrawals, lapse and the income period election. Sensitivities to key drivers such as the market volatility, the interest rate and the roll-up rate illustrate how crucial are not only the environment, but also the product design features, in order to ensure a fair and robust pricing for both customer and life insurer. In particular, the authors find that most empirical contracts are usually underpriced compared to mean optimal behavior pricing, which empirically translated into multiple updates of behavior assumptions and re-reserving by life insurers in the recent years.
Chengyi Pu, Yueyun (Bill) Chen, Xiaojun Pan
Insurance Markets and Companies, Volume 9, pp 32-40; doi:10.21511/ins.09(1).2018.04

Abstract:This paper compares the weather insurance, weather index insurance and index futures and focuses on why China needs to develop weather indexes and adopt and trade weather index futures. It further discusses how to construct the indexes and futures and how to price them. Different from the Heating Degree Days (HDDs) and Cooling Degree Days (CDDs) used at Chicago Mercantile Exchange (CME), it develops the Extremely Heating Days (EHDs) and Extremely Cooling Days (ECDs) to derive relevant temperature-based weather index futures. Recently China has started using weather index insurance to cover farmers’ risk. Through comparisons of weather index futures with index insurance, this study shows the necessity and importance of using the weather index futures to better protect farmers and better develop China’s financial markets.
Insurance Markets and Companies; doi:10.21511/ins

Victoria Borisova
Insurance Markets and Companies, Volume 9, pp 20-31; doi:10.21511/ins.09(1).2018.03

Abstract:This study investigates the features of the development of the discriminant model of diagnostics of the socio-economic potential of health insurance, and the trends in the medical insurance system development in Ukraine. This study uses logistic, statistical and normative methods to assess of the socio-economic potential of health insurance in Ukraine from 2010 to 2017. The empirical result shows that the block assessment of the financial potential of health insurance gives the complete information on the dynamics of individual indicators and trends of the branch. The need for assessment of the socio-economic potential of health insurance in order to improve the efficiency of the public financial management of the health care finance system and the insurance market regulation has been justified.
William Wise, MActSt & M.A. (Mathematics), School of Actuarial Studies, University of New South Wales, Australia
Insurance Markets and Companies, Volume 9, pp 6-19; doi:10.21511/ins.09(1).2018.02

Abstract:Life insurance is a very important segment of the economy of most countries as demonstrated by the investments, premium revenue and numbers employed. Hence, it is paramount to determine accurately how well life insurance companies (LICs) perform and how viable they are for the benefit of both other industries and national economies.Three papers that investigate LIC efficiency directly analyze how efficiency affects LIC profits. One critical feature is that they show that the inefficiency of LICs can greatly affect their (financial) outcome and ultimately their survivorship. Thus, said research clearly indicates that life insurer efficiency is a crucial area to investigate and assess and that it could greatly enhance the ability to properly monitor and inspect the life insurers.This article co-ordinates information regarding life insurance efficiency studies to help researchers learn which approaches, methods and output/input proxies to use. While some papers do so for some of the aspects that are important and necessary for life insurance efficiency studies, this is the first to deal with said aspects together. More specifically, this paper especially considers and evaluates the different methods and output proxies used in life insurance efficiency studies, as they seem to be the elements where the most disagreement exists between researchers. In addition, this article is unique in examining how input (proxy) prices are used in life insurance efficiency studies.
Elinor Mualem, Abraham Zaks, Department of Mathematics Technion, Haifa, Israel, Professor Emeritus, Department of Mathematics Technion, Actuarial Research Center, Haifa University, Haifa, et al.
Insurance Markets and Companies, Volume 9, pp 1-5; doi:10.21511/ins.09(1).2018.01

Abstract:The authors studied the process of merging insured groups, and the splitting of the profit that arises in the process due to the fact that the risk for the merged group is essentially reduced. There emerges a profit and there are various ways of splitting this profit between the combined groups. Techniques from game theory, in particular cooperative game theory turn out to be useful in splitting of the profit. The authors proceed in this paper to apply techniques of utility theory to study the possibility of a fair split of that profit. In this research, the authors consider a group of n parties 1,...,n such that each of them has a corresponding utility function u1(x),...,un(x) . Given a positive amount of money C, a fair split of C is a vector (c1,...,cn) in Rn, such that c1 +...cn = C and u1(c1) = u2(c2) = ... = un(cn). The authors presume the utility functions to be normalized, that is ui(c) = 1 for each party i, i = 1, ... ,n. The authors show that a fair split exists and is unique for any given set of utility functions u1(x), ..., un(x), and for any given amount of money C. The existence theorem follows from observing simplexes. The uniqueness follows from the utility functions being strictly increasing. An example is given of normalizing some utility functions, and evaluating the fair split in special cases. In this article, the authors study the case of merging two groups (or more) of insured members, they provide an evaluation of the emerging benefit in the process, and the splitting of the benefit between the groups.