The portuguese insurance industry: basis for strategic process decision

Nowadays, the Portuguese insurance industry operates in a market with a much more aggressive structure than a few decades ago. Markets and the economy have become globalised since the last decade of the 20th century. Market forces have gradually shifted – power is now mainly on the demand side. In order to meet the new requirements, the insurance industry must develop a strong strategic ability to respond to constant changes of the new international economic order.One of the basic aspects of this strategic development will focus on the ability to predict the future. We introduce the subject by briefly describing the sector, its organisational structure in the Portuguese market, and challenges arising from the development of the European Union. We then analyse the economic and financial structure of the sector. From this point of view, we aim at the possibility of designing models that could explain the demand for insurance, claims and technical reserves evolution. Such models, (even if based on the past), would resolve, at least partly, one of the greatest difficulties experienced by insurance companies when estimating the budget. Thus, we examine the existence of variables that explain the previous points, which are capable of forming a basis for designing models that are simple but efficient, and can be used for strategic planning.

Optimal insurance with counterparty default risk

We study the design of optimal insurance contracts when the insurer can default on its obligations. In our model default arises endogenously from the interaction of the insurance premium, the indemnity schedule and the insurer’s assets. This allows us to understand the joint effect of insolvency risk and background risk on efficient contracts. The results may shed light on the aggregate risk retention sched- ules observed in catastrophe reinsurance markets, and can assist in the design of (re)insurance programs and guarantee funds.

Tools for testing the Solvency Capital Requirement for life insurance

Longevity risk is one of the major risks that an insurance company or a pension fund has to deal with and it is expected that its importance will grow in the near future. In agreement with these considerations, in Solvency II regulation the Standard formula furnished for calculating the Solvency Capital Requirement explicitly considers this kind of risk. According to the new European rules in our paper we suggest a multiperiod approach to evaluate the SCR for longevity risk. We propose a backtesting framework for measuring the consistency of SCR calculations for life insurance policies.

Tsunamigenic earthquakes in the Gulf of Cadiz: fault model and recurrence

The Gulf of Cadiz, as part of the Azores-Gibraltar plate boundary, is recognized as a potential source of big earthquakes and tsunamis that may affect the bordering countries, as occurred on 1 November 1755. Preparing for the future, Portugal is establishing a national tsunami warning system in which the threat caused by any large-magnitude earthquake in the area is estimated from a comprehensive database of scenarios. In this paper we summarize the knowledge about the active tectonics in the Gulf of Cadiz and integrate the available seismological information in order to propose the generation model of destructive tsunamis to be applied in tsunami warnings. The fault model derived is then used to estimate the recurrence of large earthquakes using the fault slip rates obtained by Cunha et al. (2012) from thin-sheet neotectonic modelling. Finally we evaluate the consistency of seismicity rates derived from historical and instrumental catalogues with the convergence rates between Eurasia and Nubia given by plate kinematic models.

Detection and diagnosis solutions for fault-tolerant VSI

This paper presents solutions for fault detection and diagnosis of two-level, three phase voltage-source inverter (VSI) topologies with IGBT devices. The proposed solutions combine redundant standby VSI structures and contactors (or relays) to improve the fault-tolerant capabilities of power electronics in applications with safety requirements. The suitable combination of these elements gives the inverter the ability to maintain energy processing in the occurrence of several failure modes, including short-circuit in IGBT devices, thus extending its reliability and availability. A survey of previously developed fault-tolerant VSI structures and several aspects of failure modes, detection and isolation mechanisms within VSI is first discussed. Hardware solutions for the protection of power semiconductors with fault detection and diagnosis mechanisms are then proposed to provide conditions to isolate and replace damaged power devices (or branches) in real time. Experimental results from a prototype are included to validate the proposed solutions.

The 1998 Faial earthquake, Azores: Evidence for a transform fault associated with the Nubia-Eurasia plate boundary?

With very few exceptions, M > 4 tectonic earthquakes in the Azores show normal fault solution and occur away from the islands. Exceptionally, the 1998 shock was pure strike-slip and occurred within the northern edge of the Pico-Faial Ridge. Fault plane solutions show two possible planes of rupture striking ENE-WSW (dextral) and NNW-SSE (sinistral). The former has not been recognised in the Azores, but is parallel to the transform direction related to the relative motion between the Eurasia and Nubia plates. Therefore, the main question we address in the present study is: do transform faults related to the Eurasia/Nubia plate boundary exist in the Azores? Knowing that the main source of strain is related to plate kinematics, we conclude that the sinistral strike-slip NNW-SSE fault plane solution is not consistent with either the fault dip (ca. 65, which is typical of a normal fault) or the ca. ENE-WSW direction of maximum extension; both are consistent with a normal fault, as observed in most major earthquakes on faults striking around NNW-SSE in the Azores. In contrast, the dextral strike-slip ENE-WSW fault plane solution is consistent with the transform direction related to the anticlockwise rotation of Nubia relative to Eurasia. Altogether, tectonic data, measured ground motion, observed destruction, and modelling are consistent with a dextral strike-slip source fault striking ENE-WSW. Furthermore, the bulk clockwise rotation measured by GPS is typical of bookshelf block rotations observed at the termination of such master strike-slip faults. Therefore, we suggest that the 1998 earthquake can be related to the WSW termination of a transform (ENE-WSW fault plane solution) associated with the Nubia-Eurasia diffuse plate boundary. (C) 2014 Elsevier B.V. All rights reserved.