The contribution of shadow insurance to systemic risk

Leong, Soon Heng; Pellegrini, Carlo; Urga, Giovanni

doi:10.1016/j.jfs.2020.100778

Cited by 12 publications

(3 citation statements)

References 28 publications

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“…Prior to this, it was widely recognized in the academic community that the insurance industry is not prone to systemic financial risk and that the traditional insurance business makes the insurance industry have a different level of indebtedness compared to other sectors, coupled with the fact that conventional insurance companies have a low degree of affiliation with other financial institutions, so it is usually believed that the insurance industry has a lower level of systemic financial risk than the banking industry [4][5]. Systemic financial risk generally refers to the risk that financial institutions in the financial market are affected by some external shocks or internal uncontrollable factors, which leads to a chain of crises in the whole market and causes significant economic losses [6][7].…”

Section: Introductionmentioning

confidence: 99%

A Study of Systemic Financial Risk Prediction Models in the Insurance Industry

Wang,

Chen

2024

Applied Mathematics and Nonlinear Sciences

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The influence of the stability of the insurance industry on the strength of the financial market cannot be ignored, and the healthy and strong growth of the insurance industry plays an indispensable role in maintaining the stability of the whole society. To fully analyze the influence of the stability of the insurance industry on the strength of the financial market, this paper proposes a prediction model of systemic financial risk. The insurance industry’s systemic financial risk prediction indicators are determined based on the principle of selecting systemic risk factors and indicators. After preprocessing the collected relevant research data, relevant research variables are determined, a Logit prediction model for the systemic risk of the insurance industry is constructed, and a case study is conducted. The data show that the average value of GDP during these 21 years is 379642.64, and it reaches about 2.4 times the average value in 2023. The insurance industry’s economy grows steadily and rapidly. It reached the maximum response in the 10th period (0.04616), i.e., the development of China’s life insurance industry, which has a more obvious role in promoting the development of the economy. It is predicted that China’s financial risk in the insurance industry in the second half of 2024 will have a great probability of being in a low-risk state. Its predicted probability value is close to 1. The insurance industry’s healthy development has a positive impact on economic development, and the insurance industry’s stable development is of great importance to economic development, as evidenced by this study.

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Section: Introductionmentioning

confidence: 99%

A Study of Systemic Financial Risk Prediction Models in the Insurance Industry

Wang,

Chen

2024

Applied Mathematics and Nonlinear Sciences

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“…While it is true that causation in marine insurance is not easy to be consistent, it still has some coherent precedents that the courts can use. Therefore, the courts should stick to coherent precedents to ascertain the proximate cause of a loss to make their decision become entirely predictable (Leong et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

A Critical Analysis of Causation Rules in Marine Insurance

Manopo

Merkin²

2021

BESTUUR

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<div><table cellspacing="0" cellpadding="0" align="left"><tbody><tr><td align="left" valign="top"><p class="AbstractText">The United Kingdom has regulated Marine Insurance in great detail in some laws and regulations, but these regulations do not seem to have been fully implemented. This study will discuss the Causation Rules in Marine Insurance. More specifically, this article has looked at the impact of the development of the causation rules in marine insurance after implementing MIA 1906. This study argues that the efficiency test is now be regarded as a historical precedent of the causation rules. What is clear is that the operation of the efficiency test alters the rule which previously relied on a question of law by looking at the latest cause of the loss to recognize a question of fact by measuring the most predominant cause of the loss. However, it does not mean that the newest cause of the loss is automatically disregarded. An immediate cause may be proximate if it has an efficient and predominant effect to cause the loss.</p></td></tr></tbody></table></div>

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“…They came to conclusions that all dimensions of globalization positively impact life and non-life insurance density. A scientific study of Leong et al (2020) proves the fact that shadow insurance is a regulatory loophole that is exploited by certain insurance groups to increase risk exposure, which may potentially destabilise the financial system. With regard to this, there are rating agencies that objectively assess the financial situation of insurance companies.…”

Section: Introductionmentioning

confidence: 99%

Financial performance of Slovak insurance companies. Covid-19 consequences

Grofčíková

Izáková

2021

SHS Web Conf.

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Research background: Globalization trends are manifested at many levels as key phenomena of current business in the international environment. The development of international cooperation, interconnection of economies and emergence of multinational companies enable companies to increase their efficiency and performance, strengthen their position in the global market, which makes them resilient to global risks and increases investors’ return on investment. Currently, the COVID-19 pandemic with its related side effects present significant global risks that have affected strong financial companies, insurance companies included. Risk-insuring insurers face several challenges in this regard in terms of fulfillment of contractual obligations towards clients on the one hand, and the need to ensure the required financial performance and return on invested resources for the owners on the other. Purpose of the article: The aim of the paper is to identify and quantify the impact of the COVID-19 pandemic and related measures and consequences on the financial situation of insurance companies with the seat in Slovakia. Methods: The financial performance of insurance companies will be quantified for the years 2016-2020 through selected indicators of financial analysis that are used by Standard & Poor’s. Significance of differences will be detected through the Wilcoxon Two-Related-Samples Test. The sample of entities includes all insurance companies seated in Slovakia. Findings & Value added: The basic characteristics of the Slovak insurance market within the period 2019-2020 indicate a decrease in value of gross written premiums (-2.47%), insurance claims and benefits (-12.3%) and an increase of the reinsurer’s share of written premiums (2.17%) and of claims paid (22.54%).

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The contribution of shadow insurance to systemic risk

Cited by 12 publications

References 28 publications

A Study of Systemic Financial Risk Prediction Models in the Insurance Industry

A Study of Systemic Financial Risk Prediction Models in the Insurance Industry

A Critical Analysis of Causation Rules in Marine Insurance

Financial performance of Slovak insurance companies. Covid-19 consequences

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