Insurance: From Underwriting to Derivatives: Asset Liability Management in Insurance Companies (Wiley Finance)

An in-depth look at the increasingly significant convergence between the insurance industry and the capital markets. This important publication, by two premier financial experts, explores the unique convergence of finance and insurance. The book covers the basics of property-casualty insurance, securitizing insurance risks, looks at life insurance in the United States and ALM in insurance. It addresses the questions and concerns of investment banks, brokerage firms and the insurance/reinsurance sector itself, examines ongoing trends and issues, and how current market pressures on insurance companies do not just create challenges but actually point the way to future promising developments. This Book Offers An In-depth Look At The Increasingly Significant Convergence Between The Insurance Industry And The Capital Markets Which Has Resulted In Insurance Being Seen As An Up And Coming Asset Class. Demonstrating How The Industry Can Learn From Past Mistakes, The Authors Examine The Implications Of The Intertwining Of Finance And Insurance, Both For Investment Banks And Brokerage Firms As Well As The Insurance Sector Itself.--book Jacket. The Basics Of Property-casualty Insurance -- How The Premium Has Traditionally Been Envisioned -- How Price-setting Recommendations Have Evolved In The United States -- The Pricing Model Of The State Of Massachusetts -- Difficulties In Implementing Fairley's Model -- First Implications -- Option-based Insurance Pricing Models -- New Directions -- Securitizing Insurance Risks -- The Origin And Structure Of Nature-linked Bonds -- Some Caveats On Insurance-linked Bonds -- Life Insurance In The United States: History Of A Crisis -- The Source Of The Problem -- The Financial Upheaval From 1979 To 1981 -- A New Generation Of Life Insurance Products -- A Riskier Investment Strategy -- A Typical Example: Executive Life -- An Extraordinary Rise: 1974 To 1989 -- The Dizzying Fall From 1990 To April 1991 -- Alm In Insurance: An Empirical Wander Around Europe -- The Perception Of Capital Markets -- The French Case -- The German Case -- The Italian Case -- What Can Be Learned? -- Should Equity Be Covered? -- Factoring Details Into The Insurance Equation -- Life Insurance Pricing And The Measurement Of The Duration Of Liabilities -- The Model And Its Assumptions -- Equity And Liabilities Valuation -- The Required Guaranteed Interest Rate And Participation Level -- The Effect Of Total Volatility On The Level Of The Guaranteed Interest Rate -- The Effect Of Total Volatility On The Level Of The Participation Coefficient -- The Impact Of The Leverage On The Guaranteed Rate -- Regulatory Implications -- The Interest-rate Elasticity Of Life Insurance Liabilities -- The Duration Of Life Insurance Liabilities -- Why Does Equity Behave Like A Short Straddle? -- A Functional Approach To The Insurance Industry -- The Genoa Merchant -- Banking And Insurance : The Traditional Approach -- The Virtual Economy And The Need For Functional Analysis -- Should Insurance Companies Be Afraid Of The Big Bad Wolf? -- Conclusion And Future Challenges. Eric Briys And François De Varenne. Includes Bibliographical References And Index. 000a.tif......Page 1 000b!.tif......Page 2 000c.tif......Page 3 000d.tif......Page 4 001.tif......Page 5 002-003.tif......Page 6 004-005.tif......Page 7 006-007.tif......Page 8 008-009.tif......Page 9 010-011.tif......Page 10 012-013.tif......Page 11 014-015.tif......Page 12 016-017.tif......Page 13 018-019.tif......Page 14 020-021.tif......Page 15 022-023.tif......Page 16 024-025.tif......Page 17 026-027.tif......Page 18 028-029.tif......Page 19 030-031.tif......Page 20 032-033.tif......Page 21 034-035.tif......Page 22 036-037.tif......Page 23 038-039.tif......Page 24 040-041.tif......Page 25 042-043.tif......Page 26 044-045.tif......Page 27 046-047.tif......Page 28 048-049.tif......Page 29 050-051.tif......Page 30 052-053.tif......Page 31 054-055.tif......Page 32 056-057.tif......Page 33 058-059.tif......Page 34 060-061.tif......Page 35 062-063.tif......Page 36 064-065.tif......Page 37 066-067.tif......Page 38 068-069.tif......Page 39 070-071.tif......Page 40 072-073.tif......Page 41 074-075.tif......Page 42 076-077.tif......Page 43 078-079.tif......Page 44 080-081.tif......Page 45 082-083.tif......Page 46 084-085.tif......Page 47 086-087.tif......Page 48 088-089.tif......Page 49 090-091.tif......Page 50 092-093.tif......Page 51 094-095.tif......Page 52 096-097.tif......Page 53 098-099.tif......Page 54 100-101.tif......Page 55 102-103.tif......Page 56 104-105.tif......Page 57 106-107.tif......Page 58 108-109.tif......Page 59 110-111.tif......Page 60 112-113.tif......Page 61 114-115.tif......Page 62 116-117.tif......Page 63 118-119.tif......Page 64 120-121.tif......Page 65 122-123.tif......Page 66 124-125.tif......Page 67 126-127.tif......Page 68 128-129.tif......Page 69 130-131.tif......Page 70 132-133.tif......Page 71 134-135.tif......Page 72 136-137.tif......Page 73 138-139.tif......Page 74 140-141.tif......Page 75 142-143.tif......Page 76 144-145.tif......Page 77 146-147.tif......Page 78 148-149.tif......Page 79 150-151.tif......Page 80 152-153.tif......Page 81 154-155.tif......Page 82 156-157.tif......Page 83 158-159.tif......Page 84 160-161.tif......Page 85 162-163.tif......Page 86 164-165.tif......Page 87 Over recent years the insurance industry has faced a period of rapid change and consolidation with recent disasters, both natural and manmade highlighting the problems the industry faces. Yet this has also been a time of opportunity, with the rise of securitization, the insurance industry has turned financial necessity into lucrative invention. According to the UK magazine, The Economist (16 January 1999), the non-life insurance industry (otherwise known as the property-casualty (P/C) or property-liability insurance industry) is in trouble.