Business Commons^™

Modelling Climate Litigation Risk For (Re)Insurers, Martin Lockman

Sabin Center for Climate Change Law

In response to the growing threat of climate change, the insurance industry has made significant investments in modelling and quantifying physical climate risks. However, the emerging risk of climate litigation has proven particularly difficult to model. In 2015 Mark Carney, then-Governor of the Bank of England and Chairman of the Financial Stability Board, warned that climate litigation poses “long-tail risks” for insurers that may be “significant, uncertain and non-linear.” Since that warning, the number of climate-related cases has more than doubled, and the scope and financial significance of climate litigation has become increasingly clear. However, insurers and regulators still struggle …

Exploring Mechanisms Insurers Employ To Set Premiums And Maximize Profitability, Brent Ferenczy

Senior Honors Theses

The insurance industry is a very complex segment of the macroeconomy. An explain will be given as to how these companies are able to maintain and maximize their profits, allowing them to remain in business. A key area in this process is the setting of premiums. This activity draws from many areas of the business model. This paper will start with a birds-eye view and telescope in, starting with standard business practices and ending with specific undertakings of insurance companies. Companies must keep adequate liquid funds. This is done mainly through forecasting cash outflows and investing their assets under management. …

Law School News: National Housing Advocate Named To Lead Rwu's New Real Estate Initiatives 02/08/2022, Roger Williams University School Of Law

Life of the Law School (1993- )

No abstract provided.

Third Party Moral Hazard And The Problem Of Insurance Externalities, Gideon Parchomovsky, Peter Siegelman

All Faculty Scholarship

Insurance can lead to loss or claim-creation not just by insureds themselves, but also by uninsured third parties. These externalities—which we term “third party moral hazard”—arise because insurance creates opportunities both to extract rents and to recover for otherwise unrecoverable losses. Using examples from health, automobile, kidnap, and liability insurance, we demonstrate that the phenomenon is widespread and important, and that the downsides of insurance are greater than previously believed. We explain the economic, social and psychological reasons for this phenomenon, and propose policy responses. Contract-based methods that are traditionally used to control first-party moral hazard can be welfare-reducing in …

Predictors Of Fraudulent Monday Effect Workers Compensation Claims Filing, Sharla St. Rose

FIU Electronic Theses and Dissertations

Monday Effect Claims refer to workers compensation claims filed on Mondays for easy to conceal injuries such as strains, sprains, and back injuries. Researchers and industry experts have long believed that there is an element of fraud in these claims, resulting from individuals who were injured during the weekend, while not at work, looking to take advantage of the medical benefits available through workers compensation insurance. Fraudulent Monday Effect Claims (FMEC), as presented in this study, specifically refer to workers compensation claims filed for injuries that occurred while an individual was not at work, presumably during the weekend.

A study …

Digital Disruption In The Financial Services Industry: The Emergence Of Fintech, Alex Guenther

Honors Program Theses and Projects

Financial services, traditionally consisting of banking, asset management, lending, insurance, and payment systems, are facing a perfect storm brought on by technological innovation and shifting customer expectations. Such changes have exposed a gap in the financial services space between those who have access and those who do not. Traditional financial institutions have been hindered in pursuing strategies of financial inclusion to large underserved and underbanked populations. There is a major opportunity for financial technology companies to alter the competitive dynamics in an industry that has long been dominated by major banks and other large financial institutions. ‘Fintech’, as it is …

Climate Change Preparedness In The Insurance Sector, Daniel Fischler

Honors Scholar Theses

Climate change is the inevitable consequence of human activity since the industrial revolution began centuries ago. Assuming humanity survives and adapts to this scenario, there will be significant impacts on the economy and business. Under these circumstances, the insurance sector in particular will face challenges as the frequency and severity of losses increase due to climate change related events. This paper aims to analyze various options for allowing insurance to maintain viability in this changing environment. The general issue for the future is premiums must be commensurate with climate change related risk in affected areas. As a result, certain coastal …

Allianz Life Strategic Audit, Evan Powell

Honors Theses

Allianz Life is a company that specializes in creating life insurance and annuity products to wholesale to financial professionals. The company is based out of Minneapolis, MN, and is a subsidiary of the parent company Allianz SE. Allianz SE is the 46th largest company in the world and ranks number one for assets managed by an insurance company. Allianz SE is based out of Munich, Germany. This report aims to learn more about Allianz Life through internal and external analysis. The following analytical tools will be included: PESTEL, Porter’s Five Forces, and SWOT analysis. These tools help to explain the …

Pacific Life Strategic Analysis, Jake Litel-Smith

Honors Theses

Pacific Life is one of the most recognizable names in life insurance. The company is known for its brand and consistent delivery on its promises for over 150 years. This study shows a comprehensive analysis of Pacific Life, including external and internal considerations. Porter’s Five Forces and PESTEL will provide a guide to understanding the environment outside of the company. A SWOT analysis will provide a better grasp on the company’s current market position. The analysis will conclude with an understanding of Pacific Life’s current strategy and recommendations for its future success.

Revman: Revenue-Aware Multi-Task Online Insurance Recommendation, Yu Li, Yi Zhang, Lu Gan, Gengwei Hong, Zimu Zhou, Qiang Li

Research Collection School Of Computing and Information Systems

Online insurance is a new type of e-commerce with exponential growth. An effective recommendation model that maximizes the total revenue of insurance products listed in multiple customized sales scenarios is crucial for the success of online insurance business. Prior recommendation models are ineffective because they fail to characterize the complex relatedness of insurance products in multiple sales scenarios and maximize the overall conversion rate rather than the total revenue. Even worse, it is impractical to collect training data online for total revenue maximization due to the business logic of online insurance. We propose RevMan, a Revenue-aware Multi-task Network for online …

The Effects Of Catastrophes On Insurance And Reinsurance Markets, Joshua Albin

Mathematical Science: Student Scholarship & Creative Works

In recent years, we have seen quite a few large catastrophes, ranging from natural disasters to pandemics, have a huge impact on the lives of everyday Americans. In particular, the devastating effects of the Coronavirus have shown how important it is to prepare for these catastrophes. Both insurance and reinsurance companies must ensure they can transfer some of the risk of these low-frequency, high-severity events to other entities. However, it is difficult to know how much risk-sharing is needed, considering it is tough to predict future catastrophes. Therefore, this paper analyzes the effects of catastrophes on the insurance and reinsurance …

Why Some People Consume Counterfeit Drugs In Benin, Maxime A. Ahouansou

English Language Institute

Despite the threat counterfeit drugs represent to health and the government’s endeavor to discourage their consumption, some people in Benin still prefer buying medicine in the underground economy. This research purported to understand the causes of the phenomenon. The research method used a survey of a sample of sixty-eight people randomly selected at Cotonou, a city with a population representative of Benin general population status regarding socio-economic conditions. The data about people's habits regarding drug consumption, monthly income, insurance coverage, and reasons why people chose to buy counterfeit medicines were collected and analyzed using Excel Spreadsheet. The analysis of those …

The Paradox Of Insurance, Gideon Parchomovsky, Peter Siegelman

All Faculty Scholarship

In this Article, we uncover a paradoxical phenomenon that has hitherto largely escaped the attention of legal scholars and economists, yet it has far-reaching implications for insurance law: loss-creation by uninsured parties caused by the presence of insurance. Contrary to the conventional wisdom, we show that insurance can create significant negative externalities by inducing third parties to engage in antisocial, illegal and unethical activities in order to extract money from insureds or insurers. Moreover, as the amount and scope of insurance grows, so does its distortionary effect on third parties. We term this phenomenon the paradox of insurance. The risk …

Private Equity Value Creation In Finance: Evidence From Life Insurance, Divya Kirti, Natasha Sarin

All Faculty Scholarship

This paper studies how private equity buyouts create value in the insurance industry, where decentralized regulation creates opportunities for aggressive tax and capital management. Using novel data on 57 large private equity deals in the insurance industry, we show that buyouts create value by decreasing insurers' tax liabilities; and by reaching-for-yield: PE firms tilt their subsidiaries' bond portfolios toward junk bonds while avoiding corresponding capital charges. Previous work on affiliated or "shadow" reinsurance and capital management misses the important role that private equity buyouts play as recent drivers of these phenomenon. The trend we document is of growing importance in …

Covid-19 Business Interruption Insurance Losses: The Cases For And Against Coverage, Christopher French

Journal Articles

The financial consequences of the government-ordered shutdowns of businesses across America to mitigate the COVID-19 health crisis are enormous. Estimates indicate that small businesses have lost $255 to $431 billion per month and more than 44 million workers have been laid off. When businesses have requested reimbursement of their business interruption losses from their insurers under business interruption policies, their insurers have denied the claims. The insurance industry also has announced that business interruption policies do not cover pandemic losses, so they intend to fight COVID-19 claims “tooth and nail.” More than 450 lawsuits throughout the country already have been …

Blockchain And Insurance: A Review For Operations And Regulation, Richard Brophy

Articles

The purpose of this paper is to examine the operational and regulatory positions of the employment of Blockchain in the insurance industry. Blockchain technology has attracted wide interest from various stakeholders. Many theorists are predicting that this technology will disrupt financial services, including insurance. As stated that the development of blockchain is dependent on regulatory acceptance of this technology, it is essential to establish the current state of play with regard to the application and use of blockchain from a commercial and regulatory standpoints.

Law Library Blog (November 2019): Legal Beagle's Blog Archive, Roger Williams University School Of Law

Law Library Newsletters/Blog

No abstract provided.

The Effect Of The 1918 Influenza Pandemic On U.S. Life Insurance Holdings, Dr. Joanna Short

Economics: Faculty Scholarship & Creative Works

This paper examines the effect of a sharp rise in mortality, the 1918 influenza epidemic, on life insurance holdings in the U.S. The BLS Cost of Living Surveys of 1918-1919 provide a unique opportunity to examine the effect of the pandemic—some households were surveyed before, and others during or shortly after the worst of the influenza outbreak. In addition, I use state-level insurance sales data to compare the increase in spending on insurance in states particularly hard hit by the epidemic, relative to those that were not. I find some evidence that, in the immediate aftermath of the epidemic, those …

Law School News: Throw Out The Old Thinking 9-30-2019, Michael M. Bowden

Life of the Law School (1993- )

No abstract provided.

Evolution Of Insurance: A Telematics-Based Personal Auto Insurance Study, Yuanjing Yao

Honors Scholar Theses

Insurance has been constantly evolving since its inception; nowadays, insurance has become an indispensable part of people’s daily life. Nonetheless, very few individuals understand the mechanism behind their insurance coverage. This paper focuses on the evolution of personal auto insurances. The first part of the paper summarizes traditional pricing techniques for personal auto insurance and discusses their deficiencies. The second part of the paper introduces telematics insurance, an innovative form of auto insurance. This new kind of insurance integrates telematics as well as other technologies in the premium calculation process. The study proceeds to evaluate the pros and cons of …

Social Marketing And The Implementation Of The National Disability Insurance Scheme, Jodie Kleinschafer, Felicity Small, Mona Nikidehaghani

Faculty of Business - Papers (Archive)

The National Disability Insurance Scheme (NDIS) is a nation-wide government policy designed to support people living with a disability (PWD) and constitutes a significant reform in the provision of disability funding in Australia. This reform is a rapidly implemented response to the poor living conditions for PWD, as identified in the Australian Productivity Commission's report in 2011. It is founded on the social aim of empowering PWD with choice and control so they can "live an ordinary life". As such the implementation of this policy could have benefited from the application of social marketing strategy from the beginning, as the …

Regulating Robo Advice Across The Financial Services Industry, Tom Baker, Benedict G. C. Dellaert

All Faculty Scholarship

Automated financial product advisors – “robo advisors” – are emerging across the financial services industry, helping consumers choose investments, banking products, and insurance policies. Robo advisors have the potential to lower the cost and increase the quality and transparency of financial advice for consumers. But they also pose significant new challenges for regulators who are accustomed to assessing human intermediaries. A well-designed robo advisor will be honest and competent, and it will recommend only suitable products. Because humans design and implement robo advisors, however, honesty, competence, and suitability cannot simply be assumed. Moreover, robo advisors pose new scale risks that …

Hard To Reach: Examining The National Disability Insurance Scheme Experience - A Case Study In Wollongong, Freda C. Hui, Corinne L. Cortese, Mona Nikidehaghani, Sandra H. Chapple, Kellie M. Mccombie

Faculty of Business - Papers (Archive)

We report on interviews conducted to examine the effectiveness of the Australian National Disability Insurance Scheme (NDIS). Our aims were to assess the effectiveness of the NDIS in communicating with people with disabilities who are socio‐economically disadvantaged, to consider the types of assistance required, and to provide recommendations to improve the NDIS. Our interviewees are characterised as ‘hard to reach’, a cohort that is missing out on benefits they might receive under the NDIS because of the socioeconomic disadvantage that compounds their disability hardship. Some of our key findings were that many of our interviewees were unaware of the NDIS, …

A Changing Industry: An Analysis Of The Effects Of Direct-To-Consumer Advertising On The Insurance Industry, James Bonvicini

Honors Scholar Theses

Direct-to-consumer selling is a shift in the strategies of many companies. As technology continues to play a prominent role in business, companies need to adapt to accommodate, and take advantage of, new opportunities that become available. Many insurance companies are now focusing on improving their direct-to-consumer selling efforts and attracting consumers with new online selling platforms. This thesis looks at the changes inside and outside of the industry that led to this direct method of selling and the impact that this has on the intermediaries in the industry, with a focus on property and casualty businesses. Additionally, this thesis takes …

Do Disaster Experience And Knowledge Affect Insurance Take-Up Decisions?”, Jing Cai, Changcheng Song

Research Collection Lee Kong Chian School Of Business

This study examines the effect of experience and knowledge on weather insurance adoption. First, we conduct insurance games with farmers, and find that the treatment improves real insurance take-up by 46%. The effect is not driven by changes in risk attitudes and perceived probability of disasters, or by learning of insurance benefits, but is driven by the experience acquired in the game. Second, we find that providing information about the payout probability has a strong positive effect on insurance take-up. Finally, when subjects receive both treatments, the probability information has a greater impact on take-up than does the disaster experience.

Microchips: Technology That Can Change Medical Services, Dale H. Shao, Ralph E. Mckinney, Lawrence P. Shao

Management Information Systems Faculty Research

Healthcare costs have increased greatly over the last few years. The result is a tremendous burden for businesses and private individuals. Experts say there is no end in sight to this increase. This situation has forced the federal government, state governments, and private industry, to investigate methods to slow down and reduce this constant increase in healthcare costs. Microchip technologies have been presented as a means to ensure better patient care while a/so reducing costs and errors resulting from the current system of healthcare. This paper presents an overview of microchip technology programs, issues with implementation, and future considerations for …

Health Insurance Co-Ops: Product Availability And Premiums In Rural Counties, Erika C. Ziller Phd, Zachariah T. Croll Ba, Andrew F. Coburn Phd

Access / Insurance

Created by the Affordable Care Act (ACA), Consumer Operated and Oriented Plans (CO-OPs) are private, non-profit health insurers that were designed to increase insurance plan choice and lower premiums in the Health Insurance Marketplaces. Early analyses of the ACA suggested that CO-OPs may be particularly beneficial for rural communities, where fewer individual and small group health insurance options have traditionally been available.

This Research and Policy Brief, authored by research staff at the Maine Rural Health Research Center, explores the early availability and role of CO-OPs in rural and urban counties. We describe the regional distribution and market prevalence of …

An Appraisal Of The Actuaries’ Climate Risk Index, Stephen Lee Kolk

May 18, 2016: The Economic Impacts of Sea-Level Rise in Hampton Roads

PDF of powerpoint presentation given at the workshop "The Economic Impacts of Sea-Level Rise in Hampton Roads: An Appraisal of the Projects Underway" on May 18, 2016 at the Virginia Modeling and Simulation Center, 1030 University Blvd, Suffolk, VA 23435

Why Not Fix It?, William H. Lane

English Faculty Publications

Have you felt the pinch of rising health care costs this year? If not, maybe you haven't actually needed to see a doctor or pay for a prescription. Even those of us who are lucky enough to be "covered" at work have noticed rapidly rising deductibles and copays - and shrinking networks of providers. Employers, facing a big, one-year increase in insurance costs, naturally enough go shopping for a new plan. But the big savings with a new plan often mean a big effective pay cut for everyone who's covered under it when employee contributions, deductibles and copays all rise …

2016 Csr Planning At Pemco Insurance, Joe Lawless

MICCSR Case Studies

No abstract provided.