Band 16, Heft 2

Following the increasing necessity of quantitative measures for the impact of natural catastrophes, this paper proposes a new technique for a probabilistic assessment of seismic risk by using publicly available data on the earthquakes that have occurred in Italy. We implement an insurance-oriented methodology to produce a new map of the seismic risk and to evaluate, under various hypotheses, the costs of insuring all the Italian housing units against it. The model is compared with two main privately developed models, well known in the reinsurance industry, providing fairly similar results.

Most existing researches on optimal reinsurance contract are based on an insurer’s viewpoint. However, the optimal reinsurance contract for an insurer is not necessarily to be optimal for a reinsurer. Hence, this study aims to develop the optimal reciprocal reinsurance which satisfies the benefits of both the insurer and reinsurer. Additionally, due to legislative restriction or risk management requirement, the wealth of insurer and reinsurer are frequently imposed upon a VaR (Value-at-Risk) or TVaR (Tail Value-at-Risk) constraint. Therefore, this study develops an optimal reciprocal reinsurance contract which maximizes the common benefits (evaluated by weighted addition of expected utilities) of the insurer and reinsurer subject to their VaR or TVaR constraints. Furthermore, for avoiding moral hazard problem, the developed contract is additionally restricted to a regular form or incentive compatibility (both indemnity schedule and retained loss schedule are continuously nondecreasing).

Morbidity and Mortality have also been a reason for concern for the insurers as increased morbidity and mortality contribute to a higher cost of claims including claim frequency. Currently, there are only two rating factors (Age and types of cattle) being adopted by the insurers while determining the premium rates and there is no risk-based pricing adopted for Cattle Insurance in India. The main objective of this paper is to identify the important rating factors influencing the mortality and morbidity trends among different cattle types in India. Secondly, there is a need to examine whether the mortality and morbidity trends vary across different parameters like animal type, breeds, age, gender, agro-climatic zone, types of formers/animal owners, etc. If it varies, then to find out the degree of variations and also measure the impact of these rating factors on cattle mortality. This paper focuses on the analysis of the morbidity and mortality of cattle across different types of cattle, breeds, age groups, gender, and different agro-climatic regions, etc. Further, it also examines the differences in cattle management practices; particularly the frequency and the quantity of feed, types, and quality of feed (nutritional value) given, animal healthcare management, exposure to catastrophic risk hazards, etc., with a view to developing risk-based pricing for cattle insurance. This would help insurers to understand the changes in cattle mortality and morbid trends and also build a comprehensive mortality table across different types and breeds of cattle. This would also immensely help the insurers in determining risk-based premium rates among different types of animals, their breeds, geographic regions, customer types, etc. which would enable in developing sustainable cattle insurance portfolio in the Indian insurance market. The output of the analysis can also be used by the insurers to develop index-based livestock insurance as well as parametric insurance.

This is the first study to systematically investigate the extent of financial integration in the small, open Pacific Island Countries (PICs). The study applies Autoregressive Distributed Lag co-integration technique on interest rate spreads and covers Fiji, Papua New Guinea, Vanuatu and Tonga, while controlling for the effects from Australia and the United States for the period 1992 to 2019. In the short run, there is some evidence of regional as well as global integration. In the long run, both regional and global integrations become more pronounced. Explanations, consequences and policy implications are discussed.