In this paper we assess the impact of the financial crisis on insurance markets and the role of the insurance industry in the crisis itself. We examine some previous "insurance crises" and consider the effect of the crisis on insurance risk-the liabilities arising from contracts that insurers underwrite. We then analyse the effects of the crisis on the performance of insurers in different markets and assess the extent of systemic risk in insurance. We conclude that, while systemic risk remains lower in insurance than in the banking sector, it is not negligible and has grown in recent years, partly as a consequence of insurers' increasing links with banks and their recent focus on non-(traditional) insurance activities, including structured finance. We conclude by considering the structural changes in the insurance industry that are likely to result from the crisis, including possible effects on "bancassurance" activity, and offer some thoughts on changes in the regulation of insurance markets that might ensue.

PurposeThe purpose of this paper is to look at the main empirical findings related to the bank‐insurance model and to outline the market practices across the world. The market dynamics underpinning the bancassurance phenomenon are analyzed alongside discussions of the various bancassurance products and bank‐insurance modes of entry.Design/methodology/approachThe paper presents a brief survey of the bank‐insurance trend and provides an insight into the underlying dynamics and corporate structures of financial conglomerates.FindingsThere is an uneven success of the bancassurance phenomenon across the world. It is not clear whether re‐regulation is the cause or response to globalization, and vice versa, which in turn both shape the bancassurance arena. A number of incentives for the formation of financial conglomerates are identified. Finally, three modes of entry have been documented to reflect market realities.Originality/valueThe paper will be of value to those interested in financial conglomerates, banking and insurance. It is suitable for academics and practitioners alike.

The current study reviews the risk financing techniques employed in the insurance markets and looks at the changing field of the risk management arena. The overarching view is that apart from the traditional channels of financing risk, alternative routes should be explored. The latter is strengthened with the surfacing of off-balance sheet instruments in modern financial markets. The paper extends the discussion to the layered risk financing approach and reinforces its importance. That is, cash flow engineering instruments are employed to match different segments of the loss distributions. The role of insurance risk capital to assume extreme losses is further discussed, while reinsurance still remains a form of capital restructuring. Taken all together, the intention is that risk financing should be able to release assets committed to liabilities, and should reduce the cost of risk capital in sponsoring all-purpose equity. Finally, risk management platforms are redefined, while the securitisation of insurance risk is explored along with its effectiveness and possible caveats.

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