IDEAS home Printed from https://ideas.repec.org/a/osi/journl/v5y2009p471-479.html
   My bibliography  Save this article

Challenges in Insurance Industry

Author

Listed:
  • Zeljko Sain

    (School of economics and business in Sarajevo,University in Sarajevo, Bosnia and Herzegovina)

  • Jasmina Selimovic

    (School of economics and business in Sarajevo,University in Sarajevo, Bosnia and Herzegovina)

Abstract

How is possible to manage many numerous risks, in order to achieve human as well as environmental wellbeing, and to form modern insurance industry? This issue is very modern and it requires rational answers. Also, this is field of scientific research. Research results are commonly used by law regulative as row model for the profession and practice. Is mentioned line we can identify challenges in insurance sector. What are the characteristics of these challenges in developed and developing countries? What is the behavior of countries that are liders and those that are not? What are financial components, and what are social and personal effects of the modern insurance industry development? Insurance sector always has its own clear mission: to achieve as high as possible level of spiritual and material safety of the person insured. The vision should be achieving as high as possible level of spiritual and material safety of the person insured in real environment. Mission and vision of the insurance continuously transformed industry from everyday human activity to modern industry. This trend can not be stopped, because we are able to identify more and more risks every day and their identification, processing and management is more challenging. Two components are very important: financial and social. Developed countries formed the insurance industry as powerful and respectful sector that is important part of financial market. Its users are hundreds of millions of citizens and companies. Financial effects of life insurance are much higher that those of non-life. Developing countries has no alternative than to follow, as quickly as they can, the developed countries path. That should make easier building own insurance industry. Globalization, controlled liberalization and all migration movements are additional and unavoidable factors that support insurance challenges. What is the suggestion for small, not enough developed countries as Bosnia and Herzegovina or all countries of ex-Yugoslavia? Basic scientific truths in this field are continuous: probability theory and great numbers law, actuarial calculus based on relevant empiric research. Insurance challenges start with actuarial calculus and data needed. That follows portfolio formulation and investment of temporarily available funds. That means participation of insurance companies at financial markets as financial intermediates. How these challenges are present and how is possible to manage them in insurance sector of developed and developing countries as Bosnia and Herzegovina?

Suggested Citation

  • Zeljko Sain & Jasmina Selimovic, 2009. "Challenges in Insurance Industry," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 5, pages 471-479.
    • Handle: RePEc:osi:journl:v:5:y:2009:p:471-479
    as

    Download full text from publisher

    File URL: http://www.efos.hr/repec/osi/journl/PDF/InterdisciplinaryManagementResearchV/IMR5a39.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Grosen, Anders & Løchte Jørgensen, Peter, 2001. "Life Insurance Liabilities at Market Value," Finance Working Papers 01-4, University of Aarhus, Aarhus School of Business, Department of Business Studies.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bernard, Carole & Boyle, Phelim P., 2011. "A Natural Hedge for Equity Indexed Annuities," Annals of Actuarial Science, Cambridge University Press, vol. 5(2), pages 211-230, September.
    2. Tak Siu & John Lau & Hailiang Yang, 2007. "On Valuing Participating Life Insurance Contracts with Conditional Heteroscedasticity," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 14(3), pages 255-275, September.
    3. Gerstner, Thomas & Griebel, Michael & Holtz, Markus & Goschnick, Ralf & Haep, Marcus, 2008. "A general asset-liability management model for the efficient simulation of portfolios of life insurance policies," Insurance: Mathematics and Economics, Elsevier, vol. 42(2), pages 704-716, April.
    4. Lim, Terence & Lo, Andrew W. & Merton, Robert C. & Scholes, Myron S., 2006. "The Derivatives Sourcebook," Foundations and Trends(R) in Finance, now publishers, vol. 1(5–6), pages 365-572, April.
    5. Laura Ballotta, 2009. "Pricing and capital requirements for with profit contracts: modelling considerations," Quantitative Finance, Taylor & Francis Journals, vol. 9(7), pages 803-817.
    6. Broeders, Dirk & Chen, An & Koos, Birgit, 2011. "A utility-based comparison of pension funds and life insurance companies under regulatory constraints," Insurance: Mathematics and Economics, Elsevier, vol. 49(1), pages 1-10, July.
    7. Kevin Fergusson & Eckhard Platen, 2013. "Real World Pricing of Long Term Cash-Linked Annuities and Equity-Linked Annuities with Cash-Linked Guarantees," Research Paper Series 338, Quantitative Finance Research Centre, University of Technology, Sydney.
    8. Kubitza, Christian & Grochola, Nicolaus & Gründl, Helmut, 2021. "Life insurance convexity," ICIR Working Paper Series 42/21, Goethe University Frankfurt, International Center for Insurance Regulation (ICIR).
    9. Thomas Poufinas, 2011. "On the pricing of single premium variable annuities with periodic fees and periodic cost of insurance using option pricing techniques," International Journal of Financial Markets and Derivatives, Inderscience Enterprises Ltd, vol. 2(3), pages 180-194.
    10. Andreas Reuß & Jochen Ruß & Jochen Wieland, 2016. "Participating Life Insurance Products with Alternative Guarantees: Reconciling Policyholders’ and Insurers’ Interests," Risks, MDPI, vol. 4(2), pages 1-18, May.
    11. Olivier Le Courtois & François Quittard-Pinon & Xiaoshan Su, 2020. "Pricing and hedging defaultable participating contracts with regime switching and jump risk," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 43(1), pages 303-339, June.
    12. Kling, Alexander & Richter, Andreas & Ruß, Jochen, 2006. "The Impact of Surplus Distribution on the Risk Exposure of With Profit Life Insurance Policies Including Interest Rate Guarantees," Discussion Papers in Business Administration 1220, University of Munich, Munich School of Management.
    13. Hampus Engsner & Kristoffer Lindensjö & Filip Lindskog, 2020. "The value of a liability cash flow in discrete time subject to capital requirements," Finance and Stochastics, Springer, vol. 24(1), pages 125-167, January.
    14. Devolder, Pierre & Piscopo, Gabriella, 2012. "Solvency analysis of defined benefit pension schemes," LIDAM Discussion Papers ISBA 2012030, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    15. Olivier Le Courtois & François Quittard-Pinon, 2008. "Fair Valuation of Participating Life Insurance Contracts with Jump Risk," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 33(2), pages 106-136, December.
    16. Simon Fritzsch & Philipp Scharner & Gregor Weiß, 2021. "Estimating the relation between digitalization and the market value of insurers," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(3), pages 529-567, September.
    17. Broeders, Dirk & Chen, An, 2010. "Pension regulation and the market value of pension liabilities: A contingent claims analysis using Parisian options," Journal of Banking & Finance, Elsevier, vol. 34(6), pages 1201-1214, June.
    18. Eling, Martin & Holder, Stefan, 2013. "The value of interest rate guarantees in participating life insurance contracts: Status quo and alternative product design," Insurance: Mathematics and Economics, Elsevier, vol. 53(3), pages 491-503.
    19. Gatzert, Nadine, 2019. "An analysis of transaction costs in participating life insurance under mean–variance preferences," Insurance: Mathematics and Economics, Elsevier, vol. 85(C), pages 185-197.
    20. Butler Richard J, 2017. "Econometrics Illustrated, with Applications from Insurance-Research Awards," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 11(2), pages 1-21, July.

    More about this item

    Keywords

    insurance; risks; developed countries; developing countries;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osi:journl:v:5:y:2009:p:471-479. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hrvoje Serdarusic, PhD (email available below). General contact details of provider: https://edirc.repec.org/data/efosihr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.