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 […]

Just what are ancillary own funds?

Reading the Financial Soundness Standards for Insurers (FSIs) is an exercise that can only end in madness. I’m sufficiently familiar with them now that I mostly refer back to them for particularly tricky or thorny issues. Without fail, the words fail to clearly communicate exactly what was intended. Take ancillary capital as an example. To […]

Slides from micro insurance sessional meeting in 2018

I had several requests for these slides. At some point they should also be available on ASSA’s website, but that process seems to take a curiously long time. Here are the Micro insurance sessional 2018 slides for anyone interested, provided of course without warranty or guarantee at all and with the understanding that the views expressed are […]

Why isn’t there more micro insurance in South Africa

After a recent Actuarial Society sessional presentation I gave on micro insurance and the regulatory developments, I was asked why there aren’t more micro insurers operating in South Africa. Here is a slightly paraphrased version of the full question: The larger insurance players seem reluctant to enter the market. Why do you think this market […]

Downwards counterfactual analysis

Stress and scenario testing are important risk assessment tools.  They also provide useful ways to prepare in advance for adverse scenarios so that management doesn’t have to create everything from first principles when something similar occurs. But trying to imagine scenarios, particularly very severe scenarios, isn’t straightforward. We don’t have many examples of very extreme […]

Collective nouns for cats

In my ASSA convention presentation on systemic risk last week, I took pains to highlight the difference between real systemic risk and mere catastrophic claim risk or even concentration risk. In this post I will cover these and other cats, the place of reinsurance including “feelings” and why this is hyper relevant for captives. To […]

Credit Life Aside: banning sale of credit life alongside lending?

Some markets have banned sale of insurance alongside lending Another way to deal with the problem of competition in credit life is to simply not permit the sale of insurance at the same time as the loan. This means that more providers will have an opportunity to make the sale since the lender doesn’t have […]

Credit Life regulations and reactions (3)

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 […]