Financial markets and insurance markets are converging. New forms of investment guarantees are the result, and these guarantees require all financial services firm to become more savvy in modeling and risk management, combining both actuarial science and modern methods in finance. For example, life insurance has always been designed with the objective of providing financial security to policyholders and their families. Traditional actuarial techniques focussed on the assessment and management of life contingent risks: mortality and morbidity. The investment side of insurance was generally not regarded as a source of major risk. But insurance markets around the world are changing. Policyholders want to enjoy the benefits of equity investment in conjunction with mortality protection, and insurers around the world have developed equity-linked contracts to meet this challenge. The assessment and management of financial risk and the management of insurance risk are very different, and investment guarantees require a new approach.
Book Details:
- Author: Mary Hardy
- ISBN: 9780470313459
- Year Published: 2003
- Pages: 304
- BISAC: BUS027000, BUSINESS & ECONOMICS/Finance
About the Book and Topic:
Financial markets and insurance markets are converging. New forms of investment guarantees are the result, and these guarantees require all financial services firm to become more savvy in modeling and risk management, combining both actuarial science and modern methods in finance. For example, life insurance has always been designed with the objective of providing financial security to policyholders and their families. Traditional actuarial techniques focussed on the assessment and management of life contingent risks: mortality and morbidity. The investment side of insurance was generally not regarded as a source of major risk. But insurance markets around the world are changing. Policyholders want to enjoy the benefits of equity investment in conjunction with mortality protection, and insurers around the world have developed equity-linked contracts to meet this challenge. The assessment and management of financial risk and the management of insurance risk are very different, and investment guarantees require a new approach.
Investment Guarantees in Life Insurance combines econometrics, statistics, finance, and more traditional actuarial science to derive, explain, and illustrate different ways of managing risks from investment guarantees. This one-stop reference is an indispensable resource for actuaries across the field.
ADDRESSES THE NITTY-GRITTY ISSUES OF PUTTING RISK MANAGEMENT THEORY INTO PRACTICE for insurance companies offering investment guarantees and equity-linked insurance policies. A ONE-STOP REFERENCE FOR ACTUARIES covers issues of econometrics, statistics, cash-flow simulation techniques, financial engineering, and risk measurement, all in one book. EVERY INSURANCE COMPANY AROUND THE WORLD OFFERS EQUITY-LINKED INVESTMENT GUARANTEES. This book will be a must-have reference as this insurance product line continues to grow.
About the Author
MARY HARDY is an Associate Professor and Associate Chair of Actuarial Science at the University of Waterloo, a Fellow of the Institute of Actuaries, and an Associate of the Society of Actuaries.