Does Business Rescue count as default?

What does Business Rescue mean for credit risk, ratings and cross-default? Business Rescue precludes creditors from applying for liquidation of the business. This is the removal of an existing right of lenders: “a temporary moratorium on the rights of claimants against the company or in respect of property in its possession” From what I gather […]

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 […]

ERP and how expensive is the US market now?

The US market is expensive. Less expensive than it was a few days ago before the yield curve inverted and the S&P500 had several days of large losses, but expensive still. But how expensive is it really? The Cyclically Adjusted Price Earnings (CAPE) or Shiller PE ratio is 28.5. Although this is down from January […]

Voice authentication, spoofing and rates of change

“My voice is my password” and similar phrases have begun to be used for secure voice authentication for banks and health insurers and other critical services that require security and privacy. It’s likely that several of your own service providers will roll this out in the next couple of years. Progress, right? The problem is […]

Unbelievable Risk Discounts Rates

Setting discount rates is a crucial and subjective exercise. This is true for life insurance embedded values too. Many researchers are comfortable with a range for Equity Risk Premiums of between 3% and 5%. Many corporate finance practitioners use a range from 5% to 8% or even higher. My nearly eight-year-old blog post on mis-estimating […]

Ghosts of bullets dodged

I have never owned Steinhoff shares. I was surprised then, when going through some old blog uploads (dealing with a separate copyright issue that I may touch on in another post) to find this share price graph of Steinhoff from 2007 I don’t remember looking at this, but the blog entry was actually about insider […]

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