Actuarial and Risk – Page 2 – Twenty Third Floor

Actuarial and Risk, banking, financial risk, insurance, investments, life insurance, liquidity risk, measurement, systemic risk

Liquidity vs Solvency: Understanding Insurance Company Risks

2 November 2024

David Kirk

In this exploration of liquidity and solvency risks in insurance companies, we’ll examine how these risks interact, often in surprising ways. We’ll challenge common assumptions about insurance company risks and explore how modern insurance practices have evolved traditional risk profiles. Understanding the Basics: Banks vs Insurers The classic banking model of liquidity risk is straightforward:…
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Actuarial and Risk, alternative investments, capital, capital structure, climate change, insurance, managing uncertainty, measurement, microinsurance, modelling, Solvency Assessment and Management, Solvency II, statistics

Capital Modelling for parametric insurance – intro

21 October 2024

David Kirk

As parametric insurance gains traction, insurers face specific challenges in capital modeling and regulatory capital navigation. I have a longer paper coming out on this, but if you’re looking for an intro, here are some of the interesting and different aspects compared to more traditional insurance. 1. Regulatory Uncertainty: The treatment of parametric insurance under…
Read more: Capital Modelling for parametric insurance – intro
Actuarial and Risk, capital, insurance, investments, life insurance, market risk, measurement, Solvency Assessment and Management, Solvency II

The Equity Symmetric Adjustment: Dispelling Myths and Understanding Market Dynamics

25 September 2024

David Kirk

Introduction In the world of insurance regulation, few mechanisms are as misunderstood as the equity symmetric adjustment (ESA), also known as the equity dampener. This feature, present in both the Solvency II framework in Europe and the Solvency Assessment and Management (SAM) regime in South Africa, is often incorrectly associated with the concept of mean…
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Actuarial and Risk, Demography, distribution, Featured, insurance, product & pricing

One answer could be pet insurance

16 September 2024

David Kirk

I firmly believe major demographics shifts are going to have massive social, political, economic, financial market and commercial impacts in the coming decades. The balance of savers and borrowers, investors, producers and consumers will change with complex effects. For example: 📊 Having fewer children has a temporary impact to boost productivity as resources aren’t spent…
Read more: One answer could be pet insurance
Actuarial and Risk, capital, credit risk, financial risk, insurance, life insurance, market risk, measurement, regulatory risk, Solvency Assessment and Management, Solvency II

Reinsurer credit rating and CQS – sovereign caps and misapplication of regulations

9 September 2024

David Kirk

Does the “sovereign cap” apply to credit ratings for insurer solvency reporting? This came up in a discussion about treatment of reinsurance and choice of Credit Quality Step (CQS) under South African regulations. Usually a local currency, international scale credit rating from a credit rating agency is the most direct way to establish a reliable…
Read more: Reinsurer credit rating and CQS – sovereign caps and misapplication of regulations
Actuarial and Risk, alternative investments, capital, climate change, Emerging Markets, emerging risk, hedging, insurance, investments, microinsurance, Solvency Assessment and Management, Solvency II

Parametric insurance getting ready for prime time

26 August 2024

David Kirk

Parametric insurance has been growing as a tool to manage risk transfer. This may become even more important as risks become more difficult to insure, and the basis risk becomes more palatable. Parametric insurance is showing signs of being ready for prime-time. Greater demand due to climate change, and greater supply as more entities and…
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Actuarial and Risk, emerging risk, insurance, legal risk

Forever emerging risks.

29 May 2024

David Kirk

Forever chemicals = forever lawsuits = forever claims 🔬 PFAS linked to health risks ⚖️ Regulatory scrutiny increasing 💼 D&O and liability cover at risk 🌍 Exposure is everywhere 💰 Costs could be astronomical Liability insurers have a growing emerging risk relating to the potential wave of lawsuits related to PFAS (per- and polyfluoroalkyl substances,…
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Actuarial and Risk, Featured, financial risk, insight, insurance, managing uncertainty, operational risk, Solvency Assessment and Management, Solvency II

A piece of the failure puzzle – decreasing insurer failure rates through Skilled Person Reviews

29 May 2024

David Kirk

Every failure hits policyholders’ savings or cover, impact their lives and their livelihoods. They destroys shareholder value and decrease confidence in the entire financial sector. Suggestion – Introduce the equivalent of the UK’s Skilled Person Review We must find ways to intervene with struggling insurers well before it’s time for a statutory manager or curator.…
Read more: A piece of the failure puzzle – decreasing insurer failure rates through Skilled Person Reviews

Twenty Third Floor

Figuring out the future and the now

Category: Actuarial and Risk

Liquidity vs Solvency: Understanding Insurance Company Risks

Capital Modelling for parametric insurance – intro

The Equity Symmetric Adjustment: Dispelling Myths and Understanding Market Dynamics

One answer could be pet insurance

Reinsurer credit rating and CQS – sovereign caps and misapplication of regulations

Parametric insurance getting ready for prime time

Forever emerging risks.

A piece of the failure puzzle – decreasing insurer failure rates through Skilled Person Reviews

About David Kirk

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