What is Systemic Risk?

Systemic risk is risk to the “system” in some way. In the financial services world, it is often defined in one of two ways: The risk of contagion, where failure of an entity leads to distress or failures of others [micro prudential] The risk of an event that can trigger serious consequences for the real economy. […]

Book Review: Loss Coverage – Why Insurance Works Betters with Some Adverse Selection

In his book, Loss Coverage: Why Insurance Works Better with Some Adverse Selection, Guy Thomas propose an interesting point that adverse selection may not be as harmful as many actuaries believe. They actually go further and suggest that, at least from a policy perspective, adverse selection may be a good thing. This is particularly relevant […]

Modelling one side of a two-sided problem

Ah models, my old friends. You’re always wrong, but sometimes helpful. Often dangerous too. A recent article in The Actuary magazine addressed whether “de-risking in members’ best interests?”  I say “recent” even though it’s from August because I am a little behind on my The Actuary reading. In the article, the authors demonstrate that by […]

Credit Life regulations and reactions (1)

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 […]

Current and future state of bancassurance in SA

Bancassurance, says the oracle or finance definitions online (aka Investopedia) is : …is an arrangement in which a bank and an insurance company form a partnership so that the insurance company can sell its products to the bank’s client base. This partnership arrangement can be profitable for both companies. Banks can earn additional revenue by selling […]

South Africa ranks 2nd in financial inclusion study

The Brookings Financial and Digital Inclusion Project measures South Africa one place behind Kenya in terms of financial inclusion. I’m still working my way through the full report, but Kenya’s score is a significant jump above South Africa and the closely contested positions below it. Is Kenya genuinely making such inroads or is this a […]