Effective risk management in insurance relies on well-defined risk appetite measures and limits. These frameworks guide organisations in assessing and managing their risk exposure, ensuring alignment with strategic objectives. However, the reasons for adjusting these measures can significantly influence an organisation’s effectiveness in navigating risks. Risk Appetite Measures and Limits Risk appetite articulates the level…
My son recently came home from school excited about a number guessing game they’d played in class. The rules were simple: one child thinks of a number, and then the class takes turns asking questions about it. The first child to identify the exact number wins. Before reading on, pause and consider: What strategy would…
About a decade ago, a compelling idea percolated up through academia and into industry – including the insurance industry: Signing forms at the top, rather than the bottom, could boost honesty. Researchers Francesco Gino and Dan Ariely championed this concept, which quickly gained traction. The logic seemed sound – remind people to be truthful before…
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.…
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 a micro insurer are not that trivial. For underwritten products within a full life licence? Larger premiums per policy but definitely more complexity. Competition is tougher too. Hyper local brands…
I’ve been brewing a wild idea for a while. Insurance regulations weren’t written with IFRS17 in mind. This causes some head scratching when it comes to premium volume measure for non-life insurance, but common sense gets you to the right answer without much trouble. Those who say otherwise seem to be looking for problems where…
The goals of two-pot are admirable. The implementation somehow both rushed and drawn out. The promises – of decreased unnecessary financial hardships, fewer self-defeating decisions, and improved long term savings rates are dazzling. The nagging fear though, is that whatever institutions and professionals and government departments may learn from Chile and Peru, individuals will inevitably…
I’m listening to a legal “true crime” podcast. Guilty-as-anything defendant keeps complaining about this error, this oversight, this unfair ruling. But the thing is, none of those things really mattered. They didn’t materially contribute to the guilty verdict. The judge can say, when refusing an appeal, that those are “harmless errors” in that they did…
