Capital implications of infrastructure assets for insurers under SAM

Infrastructure as an asset class is hardly a new idea. Retirement funds are attracted to the promise of higher turns, long-dated cash flows, and consistency with increasingly important ESG factors.  Insurers, unlikely retirement funds, have to hold risk-based capital against the risks inherent in their investments. This makes it more difficult to underestimate the risks […]

Summary of Cypriot capital controls

From a number of sources (CNN, USAToday, FT) No Eurozone country, since the creation of the Euro, has ever instituted capital controls. It’s not really allowed, except in exceptional circumstances. Which goes to show the value of rules with exceptions for “exceptional circumstances”. Which is to say, not much. The cost to large depositors Deposits […]

SAM Risk-free Rate Workshop

The Technical Provisions Task Group and KPMG ran a workshop for industry participation on risk-free rates recently. The idea was to see whether we could improve the extent and quality of industry comment on key, controversial areas of the proposed SAM regime. Turnout was good, but not great, but the discussion and points raised were […]

Life insurer placed into curatorship

All I can say is financial reinsurance that is just smoke and mirrors is just smoke and mirrors. More small insurers should take advice from someone other than their reinsurers when evaluating financial reinsurance in terms of its financial, regulatory and capital implications. Financial reinsurance doesn’t typically cause financial problems but it can gloss over […]

Systematic risk in insurance

Lots on this topic to come over the next few months. IAIS chair Peter Braumüller acknowledged that traditional insurance does not “generate or amplify systemic risk” within the financial system or in the real economy. Although non-traditional risks do (derivatives exposures, CDS etc.) Meanwhile, the IAIS has released it’s proposals for identification and assessment of […]

Swazi King not sure he wants the conditions attached to the loan

This is really fantastic news.  The Swazi King is apparently reluctant to accept the loan from South Africa because of the conditions imposed in the agreement. I was quite harsh in criticising the granting of the loan with only conditions for improvement far down the line.  (I still believe the first condition should be an […]

Clear, Simple and Wrong

The reason opinions are so cheap is that everyone has one and nobody wants to buy anyone else’s. I’m no different. I’m not going to try to sell you mine. I would like to present you with some ideas to think about before you overpay for someone else’s though. Jon commented on a recent post […]

Junk bonds in place of an IPO

The 30 second intro to Junk Bonds Junk Bonds, also known as High Yield Bonds, are debt instruments issued by companies with poor credit ratings, or are the debt instruments of companies that were issued as high quality bonds from strong companies that have since fallen on hard times (“Fallen Angels”). Typically these are any […]