The evolution from life insurance to financial engineering
| Autor: | Ralph S. J. Koijen, Motohiro Yogo |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2021 |
| Předmět: |
Economics and Econometrics
Equity risk Actuarial science Life insurance industry business.industry COVID-19 crisis Net worth Minimum return guarantee EGRIE Keynote Address Financial engineering Global financial crisis Variable annuity Accounting Life insurance Tax advantage Longevity insurance Economics Business Management and Accounting (miscellaneous) G32 G22 business Finance Risk management Financial services |
| Zdroj: | The Geneva Risk and Insurance Review |
| ISSN: | 1554-9658 1554-964X |
| Popis: | Since the mid-1980s, the share of household net worth intermediated by US financial institutions has shifted from defined benefit plans to life insurers and defined contribution plans. Life insurers have primarily grown through variable annuities, which are mutual funds with longevity insurance, a potential tax advantage, and minimum return guarantees. The minimum return guarantees change the primary function of life insurers from traditional insurance to financial engineering. Variable annuity insurers are exposed to interest and equity risk mismatch and their stock returns were especially low during the COVID-19 crisis. We consider regulatory changes, such as more detailed financial disclosure and standardized stress tests, to monitor potential risk mismatch and to ensure stability of the insurance sector. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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