credit risk – Twenty Third Floor

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, capital structure, credit risk, economics, Emerging Markets, insight, market risk, measurement

Does Business Rescue count as default?

5 December 2019

David Kirk

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…
Read more: Does Business Rescue count as default?
Actuarial and Risk, alternative investments, capital, credit risk, financial risk, hedging, insurance, investments, life insurance, liquidity risk, market risk, Solvency Assessment and Management, Solvency II, valuation

Capital implications of infrastructure assets for insurers under SAM

10 September 2019

David Kirk

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…
Read more: Capital implications of infrastructure assets for insurers under SAM
credit risk, insurance, legal risk, life insurance, regulatory risk

Credit Life regulations and reactions (3)

21 October 2017

David Kirk

This is a short addition to parts 1 and 2. The question as to whether the benefit payable under a credit life policy can or should include arrears payments. The purpose of a credit life policy is to protect the policyholder, the lender, and the policyholder’s estate (not necessarily in that order) against death, disability…
Read more: Credit Life regulations and reactions (3)
Actuarial and Risk, banking, competition, complexity, creating value, credit risk, distribution, economics, insurance, legal risk, life insurance, regulatory risk

Credit Life regulations and reactions (1)

12 October 2017

David Kirk

Credit Life regulations have been live for long enough now that insurers are starting to feel the impact and the shake-up of amongst industry players is starting to emerge. There have been plenty of debate around the regulations, in part because of the dramatic financial and operational impact they will have, and partly because of…
Read more: Credit Life regulations and reactions (1)
credit risk, currency risk, economics, financial risk, inflation, news, unemployment

European deflation risks not deflating

9 October 2014

David Kirk

The UK Telegraph (and other sources) are highlighting the rising panic about Euro area deflation. For those Austrian / hard money / gold standard / bitcoin / generally poorly informed amongst you, it’s not that deflation is itself a problem, but that it creates scenarios of debt spirals increasing the real value of debt obligations and…
Read more: European deflation risks not deflating
banking, Basel III, credit risk, currency risk, economics, Emerging Markets, financial risk, inflation, investments

Argentina in default for second time in 13 years

31 July 2014

David Kirk

S&P declares Argentina to be in default for the second time in 13 years and the third in 25. Inflation is likely to hit 40% this year and the Peso has already lost a quarter of its value this year, measured against the US Dollar. Messages? This time isn’t different, sovereign debt crises happen all…
Read more: Argentina in default for second time in 13 years
Actuarial and Risk, Basel III, credit risk, currency risk, economics, Solvency Assessment and Management, Solvency II

Argentina teetering towards default

25 July 2014

David Kirk

I’ve been working with a few insurers and reinsurers on credit risk recently. We’ve had plenty of reasons to think about it, what with new regulations (SAM, Basel III) and South African government downgrades. However, sometimes I get the impression that credit risk is viewed as an academic risk, as something that happens to others,…
Read more: Argentina teetering towards default

Twenty Third Floor

Figuring out the future and the now

Category: credit risk

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

Does Business Rescue count as default?

Capital implications of infrastructure assets for insurers under SAM

Credit Life regulations and reactions (3)

Credit Life regulations and reactions (1)

European deflation risks not deflating

Argentina in default for second time in 13 years

Argentina teetering towards default

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