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Risk Modelling in the Insurance Industry
Abstract
The ability to respond swiftly and effectively to a major incident caused by realisation of risks which can be influenced by factors that might come from almost all fields of insurance and reinsurance business, presents conditio sine qua non of insurance and reinsurance companies' survival and profitable continuity of business. Having that in mind and within the context of capital adequacy and imposed constraints of risk interconnectedness, the aim of our research has been to identify potential benefits and weaknesses of risk modeling. We conclude that over-reliance on risk modeling is not desirable, due to particular limitations of models. They can be powerful risk management tool only if their results are combined with expert estimates.
... In the modern risk management system, innovative methods are used to improve the effectiveness of risk analysis. The innovation lies in the fact that complex risk indicators EVA (Economic value added) and RAROC (Riskadjusted return on capital) are used for risk calculation (Njegomir & Ćirić, 2012). Both of these indicators characterize the company's economic value added. ...
Innovation, especially in the field of technology, is a key driver of competitiveness, economic growth, and prosperity. Contemporary technological changes, primarily information, and communication, are gradually transforming the economy and society, creating new ways of working and new types of jobs. These changes become challenges for insurance companies, which are conservative in terms of adopting innovations. Digitization has the ability to completely transform the insurance industry with the aim of realizing numerous benefits for the insurers and reinsurers, but also for the insured and for the economy. The aim of the paper is to analyze the importance of InsurTech as a new competition to traditional insurers and its impact on the economic growth. Given that the insurance sector contributes to the economic growth, data from the EU27 member states (for the year 2021) indicate economic recovery reflected in the GDP growth in comparison to pre-pandemic year 2019 and rebound of total insurance premiums.KeywordsCompetitionDigitizationEconomic growthInsuranceInsurTech
A lease agreement is an appointed legal transaction arose from business and legal construction created with the aim of the efficient meeting the needs of participants in the transaction. The legal theory and practice set out the criteria for the division of leasing contracts, so this legal transaction got its basic characteristic features. That is the way of a creation of basic forms of leasing agreements. According to its characteristics, a lease agreement has a mixed legal nature. Depending on the type of a contract, it may have the characteristics of a contract of sale, tenancy agreement, loan agreement, etc. In certain types of leasing, some characteristics of one of the listed traditional contracts dominate in a weaker or stronger intensity. This paper deals with a theoretical analysis of the relationship of the leasing contract with the contract law agreements. A special emphasis is placed on the operating and financial leasing as two basic types of leasing contracts varying by their nature.
Actuarial science is based on the use of financial and statistical models and depends on the practical framework, starting from the operation of the insurance market through the accounting system and the available data. Actuarial profession is highly valued in the world, due to the possibilities of significant financial benefits, but also because of the increasing expansion of the profession in different spheres of business. In order to perform his/her job successfully, an actuary needs to possess certain knowledge of statistics and mathematics to adequately evaluate the risk. Risk evaluation is a complex and responsible job, which requires from an actuary to know how to apply the statistical theory of credibility and its main methods. This paper presents some of the initial methods on which today’s methodologies in actuarial science are based and developed.
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