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on Insurance Economics |
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Issue of 2015‒12‒12
seven papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Neri, Marcelo Cortes |
| Abstract: | Insurance provision against uncertainties is present in several dimensions of peoples´s lives, such as the provisions related to, inter alia, unemployment, diseases, accidents, robbery and death. Microinsurance improves the ability of low-income individuals to cope with these risks. Brazil has a fairly developed financial system but still not geared towards the poor, especially in what concerns the insurance industry. The evaluation of the microinsurance effects on well-being, and the demand for different types of microinsurance require an analysis of the dynamics of the individual income process and an assessment of substitutes and complementary institutions that condition their respective financial behavior. The evaluation of the microinsurance effects on well-being, and the demand for different types of microinsurance require an analysis of the dynamics of the individual income process and an assessment of substitutes and complementary institutions that condition their respective financial behavior. The Brazilian government provides a relatively developed social security system considering other countries of similar income level which crowds-out the demand for insurance and savings. On the other hand, this same public infrastructure may help to foster microfinance products supply. The objective of this paper is to analyze the demand for different types of private insurance by the low-income population using microdata from a National Expenditure Survey (POF/IBGE). The final objective is to help to understand the trade-offs faced for the development of an emerging industry of microinsurance in Brazil. |
| Date: | 2015–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:epgewp:771&r=ias |
| By: | Jaroslav Mysiak (Fondazione Eni Enrico Mattei (FEEM) and Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC)); C. D. Pérez-Blanco (Fondazione Eni Enrico Mattei (FEEM) and Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC)) |
| Abstract: | Extreme events are becoming more frequent and intense, inflating the economic damages and social hardship set-off by natural catastrophes. Amidst budgetary cuts, there is a growing concern on societies’ ability to design solvent disaster recovery strategies, while addressing equity and affordability concerns. The participation of private sector along with public one through Public-Private Partnerships (PPPs) has gained on importance as a means to address these seemingly conflicting objectives through the provision of (catastrophic) natural hazard insurance. This is the case of many OECD countries, notably some EU Member States such as the United Kingdom and Spain. The EU legislator has adapted to this new scenario and recently produced major reforms in the legislation and regulation that govern the framework in which PPPs for (catastrophic) natural hazard insurance develop. This paper has a dual objective: 1) review the complex legal background that rules the provision of insurance against natural catastrophes in the EU after these major reforms; 2) assess the implications of the reforms and offer concise Policy Guiding Principles. |
| Keywords: | Public-Private Partnerships (PPPs), Natural Hazards Insurance, Economic Instruments, Solidarity |
| JEL: | Q54 Q58 G22 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2015.40&r=ias |
| By: | C. D. Pérez-Blanco (Fondazione Eni Enrico Mattei (FEEM) and Centro Euro-Mediterraneo sui Cambiamenti Climatici); C. M. Gómez (University of Alcalá de Henares, Madrid Institute for Advanced Studies in Water Technologies (IMDEA-Water) and University of Oxford) |
| Abstract: | A stable agricultural income is often regarded as a way to achieve a better environmental performance in this sector. However, conventional income stabilization tools have been showing recently signs of exhaustion. Under this critical juncture, EU institutions have encouraged the expansion of agricultural insurance. With different degrees of public support, insurance systems against several risks have been successfully developed across the EU and have adopted increasingly comprehensive forms. Eventually, EU institutions have started to assess the development of a comprehensive income insurance framework. Income insurance covers a wider variety of risks and has higher costs than conventional single risk or combined insurance. This demands an in depth knowledge of farmers’ Willingness To Pay (WTP) for this product. The following pages present a methodology that calculates the WTP for different degrees of income protection using a Revealed Preferences Model and the Certainty Equivalent theory. The methodology is applied in a drought prone area in southeastern Spain. Results show that WTP for income insurance in this area is higher than observed insurance premiums. This may play in favor of the development of sustainable income insurance systems, though additional evidence is required. |
| Keywords: | Insurance, Income, Agriculture, Certainty Equivalent, Revealed Preference Models |
| JEL: | Q14 Q17 Q18 Q20 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2015.43&r=ias |
| By: | Brownlees, Christian (Universitat Pompeu Fabra); Chabot, Benjamin (Federal Reserve Bank of Chicago); Ghysels, Eric (University of North Carolina); Kurz, Christopher J. (Board of the Governors of the Federal Reserve System) |
| Abstract: | The measurement of systemic risk is at the forefront of economists and policymakers concerns in the wake of the 2008 financial crisis. What exactly are we measuring and do any of the proposed measures perform well outside the context of the recent financial crisis? One way to address these questions is to take backtesting seriously and evaluate how useful the recently proposed measures are when applied to historical crises. Ideally, one would like to look at the pre-FDIC era for a broad enough sample of financial panics to confidently assess the robustness of systemic risk measures but pre-FDIC era balance sheet and bank stock price data were heretofore unavailable. We rectify this data shortcoming by employing a recently collected financial dataset spanning the 60 years before the introduction of deposit insurance. Our data includes many of the most severe financial panics in U.S. history. Overall we find CoVaR and SRisk to be remarkably useful in alerting regulators of systemically risky financial institutions. |
| Keywords: | Financial crisis; Systemic risk; Stress testing; credit risk; High-frequency data |
| JEL: | C13 G14 G21 G28 |
| Date: | 2015–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-2015-09&r=ias |
| By: | S. Surminski (The Grantham Research Institute on Climate Change and the Environment London School of Economics, London, United Kingdom); J.C.J.H. Aerts (Institute for Environmental Studies, VU University Amsterdam, the Netherlands); W.J.W. Botzen (Institute for Environmental Studies, VU University Amsterdam, the Netherlands); P. Hudson (Institute for Environmental Studies, VU University Amsterdam, the Netherlands); J. Mysiak (Fondazione Eni Enrico Mattei (FEEM) and Centro Euro-Mediterraneo sui Cambiamenti Climatici); C. D. Pérez-Blanco (Fondazione Eni Enrico Mattei (FEEM) and Centro Euro-Mediterraneo sui Cambiamenti Climatici) |
| Abstract: | Flood insurance differs widely in scope and form across Europe. Against the backdrop of rising flood losses a debate about the role of EU policy in shaping the future of this compensation tool is led by policy makers and industry. In this paper we investigate if and how current EU policies influence flood insurance. While the question of supply and demand is at the core of the debate, we argue that another key dimension is often overlooked: how to use insurance as a lever for risk reduction and prevention efforts. We investigate if and how current EU policies interplay with these two dimensions and then reflect on the national policy level, by illustrating two conflicting cases of flood insurance: the United Kingdom (UK), where flood insurance provision is widely available, but subject to current reform, and the Netherlands, where efforts to introduce flood insurance have only recently failed. In analysing the current positions on the role of the EU in shaping flood insurance we conclude that there is wide agreement that harmonisation of flood insurance offering across the EU is unlikely to be effective. We conclude that there is clear scope for the EU to play a greater role in linking risk transfer and prevention, beyond existing channels, to ensure an integrated approach to flood risk management across the EU. |
| Keywords: | Flood Insurance, Disaster Risk Reduction, Europe |
| JEL: | Q54 Q58 G22 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2015.41&r=ias |
| By: | Filgueira, Fernando (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations) |
| Abstract: | This document analyzes the State’s role in social matters, in terms of social insurance and protection, social promotion and investment, and its distributive and redistributive role. It also describes changes and major trends in the region’s social investment and protection between the beginning of the twentieth century and the 1980s and outlines what is being termed “the reform of social reforms” in the twenty-first century, in the light of the challenges of the region’s social development. Three recent models of universalism are presented, as well as the debates on their potential and limitations. The paper concludes with a summary of the universalist social protection project emerging in the region. |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col041:37516&r=ias |
| By: | Miranda Baires, Danilo (Comisión Económica para América Latina y el Caribe (CEPAL) United Nations) |
| Abstract: | En el presente documento se analiza la construcción de un sistema de protección social universal en El Salvador, tanto en su componente contributivo como no contributivo. Este proceso implica la puesta en marcha de un esquema de política pública basado en derechos y de ahí su vocación universal. El documento se compone de seis capítulos: el contexto histórico de la protección social en el Salvador; los problemas estructurales del país; el Sistema de Protección Social Universal (SPSU); los factores institucionales y actores, sus marcos conceptuales, prácticas y estrategias; el proceso político de formulación de la Ley de Desarrollo y Protección Social (LPDS), y las conclusiones. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col041:36860&r=ias |