Twenty Third Floor

Figuring out the future and the now

Category: managing uncertainty

economics, financial risk, hedging, managing uncertainty, market risk, measurement, modelling, news, optimisation, remuneration strategies

The first of many BEE deals drowning

5 August 2008

David Kirk

Moneyweb’s article on Barlow’s re-striking of BEE options echos my earlier post on the trouble of underwater incentive options. The sense of the article is that this sets a bad precedent. Of course, the precedent has been set years ago – I’ve personally calculated the additional costs under IFRS2 for BEE deals in danger of…
Read more: The first of many BEE deals drowning
credit risk, data analysis, economics, financial risk, managing uncertainty, market risk, news, property

Didn’t expect this? Then you were foolish.

5 August 2008

David Kirk

FNB has confirmed that they will be pulling approvals for home loans on a large scale. Many seem to have been caught by surprise. Fools. To an outsider, it appears that FNB made a mistake in underestimating the trouble in the property market when they first gave these approvals. Their estimates of property price growth,…
Read more: Didn’t expect this? Then you were foolish.
currency risk, economics, financial risk, managing uncertainty, measurement, news, statistics

Zim currency to lose the billions. for now.

30 July 2008

David Kirk

CNN article on Zim’s currency billion for one consolidation
Read more: Zim currency to lose the billions. for now.
creating value, economics, financial risk, hedging, managing uncertainty, market risk, news, operational risk, optimisation

Airlines and hedging – now there is praise

21 July 2008

David Kirk

Was watching CNN last week, and heard that at least one major US airline, South West, has been making significant use of hedging to manage their fuel costs. Many other US airlines have not been hedging significantly. Another article mentioned that Lufthansa hedged around 83% of their fuel requirements for this year. Air France-KLM hedged…
Read more: Airlines and hedging – now there is praise
data analysis, economics, financial risk, hedging, insight, managing uncertainty, measurement, news, statistics

We can’t forefast

28 May 2008

David Kirk

GDP growth below expectations and Standard Bank is likely to miss it’s already previously downwards revised earnings target. We can’t forecast. Our biases, overconfidence,Â wildÂ anchoringÂ onÂ anything outÂ there,Â herding instinctsÂ soÂ as notÂ toÂ be wrongÂ and obvious about and generalÂ inabilityÂ toÂ understand how littleÂ weÂ know aboutÂ the futureÂ are clear. So ifÂ weÂ can’t forecast,Â and soÂ manyÂ of ourÂ decisionsÂ dependÂ onÂ knowingÂ theÂ future,Â whoÂ areÂ we kididng?
Read more: We can’t forefast
economics, financial risk, insight, managing uncertainty, news, statistics

The Economy – Worse Than You Think

27 May 2008

David Kirk

Our economy barely grew in the first quarter of 2008. 2.1% real seasonally adjusted growth is shockingly low given the previous quarter’s 5.3% growth. One needs to stretch back to 2001 to find a lower point of economic growth. Mining down 22% A large part of the problem is the 22% decrease in the economic…
Read more: The Economy – Worse Than You Think
managing uncertainty, news, operational risk

Mars Phoenix Lander – beating the odds

26 May 2008

David Kirk

I’ve just finished watching the successful landing of NASA and JPL’s Phoenix lander on Mars. Previous success rate for landing on Mars was less than 50%. Not great odds by any stretch. Interesting that notÂ onlyÂ isÂ the Phoenix landerÂ made extensively outÂ ofÂ theÂ technology ofÂ theÂ failed previous attempt (Mars Polar Lander)Â butÂ theÂ resultÂ of several review boards, andÂ the Phoenix project team’s own review of…
Read more: Mars Phoenix Lander – beating the odds
capital, capital structure, economics, financial risk, hedging, insight, insurance, life insurance, managing uncertainty, news, operational risk

Confidence and capital – Nationwide has neither

30 April 2008

David Kirk

Nationwide Airlines is on the ground. A series of business and operational problems met the global economy of skyrocketing avgas prices and left them insolvent by R172m (assets of R46mÂ less liabilities of R218m). They’ve also left friends of mine stranded in South Africa after a trip from Ireland for another friend’s wedding (congratulations Kay and…
Read more: Confidence and capital – Nationwide has neither

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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