Twenty Third Floor

Figuring out the future and the now

Category: economics

complexity, economics, Equity Risk Premium, financial risk, investments, managing uncertainty, market risk, measurement

Credit Suisse annual update on market performance

12 February 2013

David Kirk

Credit Suisse has for several years now put out an annualÂ Credit Suisse Global Investment Returns Yearbook 2013 is out now. It’s worth reading in its entirety for the insights. I don’t agree with everything there, and I certainly don’t agree with the widely held view (not among the authors) that the universe of countries included…
Read more: Credit Suisse annual update on market performance
communication, complexity, economics, insight, measurement

Does being richer make you feel better than being cooler?

7 February 2013

David Kirk

Economists (and actuaries) like to measure things. The easier to measure and the more reliable the measure, the more we like to measure it. This is not unlike the drunk looking for his keys under the street lamp because that’s where the light is even if it isn’t where he dropped the keys. Sometimes the…
Read more: Does being richer make you feel better than being cooler?
credit risk, economics, financial risk, insight, news, unemployment

Worrying signs of renewed credit crunch

31 January 2013

David Kirk

The last month hasn’t been pretty for economic performance, credit or retail sales. Everyone from Richemont to Mr Price has taken a beating.Â Woolies is down about 13% in the last month. And now both Capitec and African Bank are reporting worse default experience (respectively through temporary strike-blips or through a cyclical downwards trend) and…
Read more: Worrying signs of renewed credit crunch
alternative investments, economics, news

New favourite economic term: Jedi Mind Tricks

19 September 2012

David Kirk

These aren’t the droids you are looking for. Saudi Arabia’s “jedi mind tricks” as described by FT Alphaville (and more recently here) Â involve telling the market where they want the oil price to be. The aim is that if the market knows where Saudi Arabia wants the price to be, they might conclude that Saudi…
Read more: New favourite economic term: Jedi Mind Tricks
economics, inflation, insight, news

It’s not fear when it’s what you want

17 September 2012

David Kirk

The FT is horribly confused. The point of QE3 is to loosen monetary policy to encourage consumption and investment to boost demand to get away from the zero lower band. Increased inflationary expectations are EXACTLY WHAT BERNANKE IS AFTER, not market fears of inflation.
Read more: It’s not fear when it’s what you want
economics, healthcare, insight

Community rating, universal coverage and anti-selection

9 September 2012

David Kirk

The debate around access to healthcare and medical schemes in South Africa suddenly sounds pretty similar to the healthcare debate that is part of the US presidential election.
Read more: Community rating, universal coverage and anti-selection
economics

Bad news update

24 August 2012

David Kirk

Ok it’s not all bad news. Spanish bond yields, which you know I’ve been following, are actually way down from their Everestian highs from a couple of weeks ago. There is clearly more confidence in the bail-out and political plans out there than in my head. But everything else is pretty much bad news, even…
Read more: Bad news update
complexity, creating value, economics, insight

Income inequality over average income

17 August 2012

David Kirk

In South Africa we have a major income inequality problem. It’s historical (accumulated wealth, accumulated skills) and current (disastrous public education) and isn’t going away any time soon. The free market argument here is to forget about income inequality per se and focus on economy friendly, business friendly policies that will grow the entire economy…
Read more: Income inequality over average income

About David Kirk

Featured Posts

The “Indemnity Trap”: Why Outdated Legal Models are Deferring the Promise of Parametric Insurance
by David Kirk
Parametric insurance is often marketed as the “clean” alternative to traditional risk transfer. The pitch is compelling: if a hurricane hits a specific GPS coordinate… Read more: The “Indemnity Trap”: Why Outdated Legal Models are Deferring the Promise of Parametric Insurance
The Complexities of Comparing SCR Cover Ratios Across Insurers
by David Kirk
In the insurance industry, we often use Solvency Capital Requirement (SCR) cover ratios as a key metric for comparing insurers’ financial strength. While these ratios… Read more: The Complexities of Comparing SCR Cover Ratios Across Insurers
One answer could be pet insurance
by 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… Read more: One answer could be pet insurance
A piece of the failure puzzle – decreasing insurer failure rates through Skilled Person Reviews
by 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.… Read more: A piece of the failure puzzle – decreasing insurer failure rates through Skilled Person Reviews
How and why insurers fail
by David Kirk
I’ve been updating my presentation from 2021 on “How and Why Insurers Fail”. I now estimate the annual failure rate (or at least getting into… Read more: How and why insurers fail
The hidden dangers of opinion shopping and trusting good news.
by David Kirk
I had a recent discussion on the value of getting a second opinion. There’s the old line that “if you want five opinions, ask three… Read more: The hidden dangers of opinion shopping and trusting good news.
40,000
by David Kirk
40,000. That’s the ballpark figure I usually work with as the minimum number of micro insurance policies required for scale. The expenses of running even… Read more: 40,000

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