Market discipline by depositors : impact of deposit insurance on the Indonesian banking sector

This paper investigates market discipline by depositors in the Indonesian banking sector. Does depositor discipline fulfill its role in Indonesia? Does deposit insurance affect depositor behavior thereby imposing discipline on banks? These questions are empirically examined using panel data on Indonesian commercial banks from 1998 to 2009. In Indonesia deposit insurance was introduced in 2005. Depositor discipline is examined by two measures: change in the amount of deposits and interest rate. The empirical results show that depositors pay attention to bank soundness and riskiness and select banks based on the bank's condition with particular attention paid to equity ratio. It is found that depositors impose discipline on banks, but it varies according to regulatory and economic circumstances.

Some critical legal issues affecting insurance transaction globally

Increasingly, major insurers and reinsurers are operating on a global basis. For example, General Re Corporation and Cologne Re operate in almost 150 countries : see "General Re Corporation 1999 Annual Report". This is also true for the world's major brokers, and the emergence of large broking conglomerates such as Aon and Marsh are good examples of global service providers. Against the background of this increasingly global insurance market with global participants, there are a range of common legal issues in this article but a selection of certain critical matters are canvassed in the secitons below. First there are a range of regulatory issues that must be addressed. Secondly globalisation of the industry does create added incentive for a common legal regime to cover the formation of insurance transactions and the resolution of disputes about claims, coverage and termination. In this contect codifcation of insurance laws is a critical issue. Thirdly, major advances in genetic research and biotechnology over recent years have resulted in a dramatic increase in the availability of genetic testing. These developments have given rise to concerns worldwide about the potential for misuse of genetic information by third parties such as insurers and employers. Fourthly, the essence of an insurance transaction is the transference of risk from one person to anther. It is generally accepted that this transference should occur in informed circumstances and without undue advantage being bestowed upon either party. Finally this article will consider some legal matter in relation to transacting insurance on the internet

Enhancing business continuity management capacities in the insurance industry : a Southeast Asian perspective

As a resilience enhancing practice, business continuity management (BCM) can play an important role in aiding preparation of the insurance industry for coping with the losses incurred by major discontinuity incidents: regardless of cause. Acknowledging the increasing frequency of unpredictable man-made disasters and natural catastrophes, the insurance industry would benefit from examining and implementing, where suitable, key elements of BCM. Such strategic decisions would assist insurers and re-insurers collectively to enhance mutual capability to respond to, and recover from, the impact of significant losses. This paper presents a comparison of opinions about BCM practitioners in both retail and re-insurance companies on the importance of generic continuity practices with actual levels of BCM practice across the two industry groups in Southeast Asia. It suggests means by which multi-lateral cooperation across Asian economies and between retail and re-insurance market segments might enhance the viability of the insurance industry in the face of increased stress from major natural and socio-technical hazards.

The determinants of demand for private health insurance under Medicare

Since the introduction of Medicare in 1984, the proportion of the Australian population with private health insurance has declined considerably. Insurance for health care consumption is compulsory for the public health sector but optional for the private health sector. In this paper, we explore a number of important issues in the demand for private health insurance in Australia. The socio-economic variables which influence demand are examined using a binary logic model. A number of simulations are performed to highlight the influence and relative importance of various characteristics such as age, income, health status and geographical location on demand. A number of important policy issues in the private health insurance market are highlighted. First, evidence is provided of adverse selection in the private health insurance pool, second, the notion of the wealthy uninsured is refuted, and finally it is confirmed that there are significant interstate differences in the demand for private health insurance.

The Finnish Leadership Style in Transition - A Study of Leadership Criteria in the Insurance Business, 1997-2004 (summary section only)

The aim of the study was to explore the importance of evaluating leadership criteria in Finland at leader/subordinate levels of the insurance industry. The overall purpose of the thesis is tackled and analyzed from two different perspectives: - by examining the importance of the leadership criteria and style of Finnish insurance business leaders and their subordinates - by examining the opinions of insurance business leaders regarding leadership criteria in two culturally different countries: the US and Finland. This thesis consists of three published articles that scrutinise the focal phenomena both theoretically and empirically. The main results of the study do not lend support to the existence of a universal model of leadership criteria in the insurance business. As a matter of fact, the possible model seems to be based more on the special organizational and cultural circumstances of the country in question. The leadership criteria seem to be quite stable irrespective of the comparatively short research time period (3–5 years) and hierarchical level (subordinate/leader). Leaders have major difficulties in changing their leadership style. In fact, in order to bring about an efficient organizational change in the company you have to alternate the leader. The cultural dimensions (cooperation and monitoring) identified by Finnish subordinates were mostly in line with those of their managers, whilst emphasizing more the aspect of monitoring employees, which could be seen from their point of view as another element of managers’ optimizing/efficiency requirements. In Finnish surveys the strong emphasis on cooperation and mutual trust become apparent by both subordinates and managers. The basic problem is still how to emphasize and balance them in real life in such a way that both parties are happy to work together on a common basis. The American surveys suggests hypothetically that in a soft market period (buyer’s market) managers employ a more relationship-oriented leadership style and correspondingly adapt their leadership style to a more task-oriented approach in a hard market phase (seller’s market). In making business better Finnish insurance managers could probably concentrate more on task-oriented items such as reviewing, budgeting, monitoring and goal-orientation. The study also suggests that the social safety net of the European welfare state ideology has so far shielded the culture-specific sense of social responsibility of Finnish managers from the hazards of free competition and globalization.

Adaptation and change in the Australian life insurance industry : an historical perspective

In the wake of the deregulation of the financial sector in Australia in the 1980s and 1990s the life insurance industry has undergone a period of rapid change and reorganisation. Part of this adjustment has been the move towards the integration of financial service provision and the rise of bancassurance. This paper investigates the strategies adopted by Australian life insurers as they moved into the increasingly competitive environment triggered by the lifting of government restrictions on banking practices. It compares the approach of life insurers with that adopted in an earlier period of expansion and change. During the 1950s and 1960s an influx of foreign owned insurance companies into the Australian market precipitated the diversification of domestic life insurers into other insurance markets. The catalyst for change in both cases was the change in information costs brought about by the change in the competitive environment. The experience of the Australian life insurance market would suggest that there is a link between changing information costs and changing organisational structures. However this link is circumscribed by the institutional environment.

Control of the Australian life insurance industry: an example of regulatory externalities within the Australian financial sector 1870-1945

The regulatory environment in which the Australian life insurance industry operates has its antecedents in two major periods of legislative intervention. The first established the principle of ‘freedom with disclosure’ in the 1870s, which has since formed the basis of the regulatory approach. In the 1940s, the second refined the concept in the context of a general recognition of an interventionist approach to financial markets. It is suggested that regulation of the life insurance market in Australia came about not in response to problems associated with market failure but in reaction to external influences not directly related to conditions in the Australian life insurance industry. This was impacted not only on the timing of intervention but on the approach taken as well.

The nature and development of the general insurance industry in Australia to 1973

The development of the insurance industry in Australia in the twentieth century was fundamentally shaped by a collusive code of conduct called the tariff. This arrangement, established to overcome problems of uncertainty, initially benefited both tariff and non-tariff firms by enhancing market stability. It also reduced competition. The collusive agreements gradually broke down, however, as new entrants and products entered the market in the 1950s. Self-regulation gradually gave way as the 'rules of the game' changed. The result was a period of instability before new competitive practices, and more direct and specific regulatory requirements emerged in the 1970s.

On the cost of sympathy : a alternative model of insurance markets

The paper provides an alternative model for insurance market with three types of agents: households, providers of a service and insurance companies. Households have uncertainty about future leveIs of income. Providers, if hired by a household, perform a diagnoses and privately learn a signal. For each signal there is a procedure that maximizes the likelihood of the household obtaining the good state of nature. The paper assumes that providers care about their income and also about the likelihood households will obtain the good state of nature (sympathy assumption). This assumption is satisfied if, for example, they care about their reputation or if there are possible litigation costs in case they do not use the appropriate procedure. Finally, insurance companies offer contracts to both providers and households. The paper provides sufficient conditions for the existence of equilibrium and shows that the sympathy assumption 1eads to a 10ss of welfare for the households due to the need to incentive providers to choose the least expensive treatment.

Prevention and insurance of conflict and terrorism: issues and evidence for Latin America

Includes bibliography

[Insurance in Illinois].

Title supplied by cataloger.

Not-for-profits and risk accountability : insuring the third sector

Not for profit organisations face significant challenges in managing organisational risk. In this regard not-for-profits are not unique but they are distinguishable from their 'for-profit' counterparts in that they are less likely to have the resources to find sufficient risk management strategies and plans, are very vunerable to cyclical changes in the insurance market and are not usually in a position to pass on the costs of increased premiums to third parties such as consumers of their services. This article explores the nature and extent of risks faced by the not-for-profit sector; the appropriateness and scope of risk management to reduce and manage the likelihood and incidence of risk; and the types of insurance and options to cover risks that materialise. It concludes with a recommendation for a potential course of action.

Floods and property values: A hedonic property and efficiency analysis

This study investigates the impact floods on property values using the hedonic property price approach and other relevant econometric techniques. The main objectives of this research are to investigate (1) the impact of the release of flood-risk information and the actual floods on property values (2) the temporal behaviour of negative impacts (3) the property submarket behaviour (4) the behaviour of flood affected vs flood non-affected areas and (5) the property market efficiency. The thesis expanded on the existing literature on natural disasters by applying a range of econometric techniques. Findings of this research are useful for policy decision-making which is aimed at minimizing the negative impacts of natural hazards on property markets. The thesis findings also provide a better framework for decision-making in the property insurance market. The methodological improvements that are made in the thesis will be invaluable for analysing the impacts of natural hazards elsewhere.

Análise da eficiência técnica das operadoras de planos de saúde com a utilização da análise envoltória de dados

Esta dissertação tem como objetivo a análise da eficiência técnica das operadoras de planos de saúde vis-à-vis a criação da Agência Nacional de Saúde Suplementar - ANS, no período de 2003 a 2008. Para tanto, foi utilizada a Análise Envoltória de Dados nos dados da saúde suplementar para geração das medidas de eficiência das operadoras, agrupadas em cinco modalidades: autogestão, cooperativa médica, filantropia, medicina de grupo e seguradora. Foram propostas quatro diferentes abordagens que pretenderam visualizar as performances das operadoras nas questões econômico-financeiras e assistenciais, bem como a relação do setor de saúde suplementar com o Sistema Único de Saúde - SUS. Além disso, os dados foram desagregados em grandes regiões brasileiras proporcionando a observação das diferenças regionais. Observou-se que existem grandes diferenças entre modalidades e também entre regiões. A comparação entre as medidas de eficiência nas quatro diferentes abordagens e a evolução, ano a ano, dos normativos da ANS, ainda necessita de uma análise mais detalhada, mas indica, ainda que primariamente, que as modalidades tiveram diferentes reações à regulação.

Empresas promotoras de saúde no sistema de saúde colombiano: dinâmica financeira estrutural.

Esta dissertação analisou as Empresas Promotoras de Salud (EPS), seguradoras de saúde introduzidas no sistema de saúde colombiano através da reforma sanitária instaurada com a Lei n 100/1993, desde uma perspectiva de economia política crítica, através do método de análise documental. A maioria delas são empresas privadas com finalidade lucrativa que conformaram rapidamente um oligopólio que reproduziu problemas dos modelos de Managed Care e Managed Competition já conhecidos internacionalmente. Esta dissertação analisou as relações entre os processos de financeirização do sistema capitalista e o processo de ajuste estrutural na Colômbia, com a reforma sanitária e a dinâmica financeira das EPS. Também foi analisada a introdução de mecanismos próprios do processo de financeirização na gestão financeira das EPS, como: a alavancagem; a reprodução ampliada de capital através da dívida pública; e os investimentos em ativos securitizados. Dado que o sistema de saúde atual se caracteriza por altos níveis de inequidade e injustiça, as consequências da finalidade lucrativa neste, com suas expressões concretas de sofrimento e morte na população, foram preocupações transversais deste trabalho. Os resultados desta dissertação demonstraram a concentração oligopólica do mercado de seguros privados de saúde, cujas empresas se organizaram como um cartel, dificultando o acesso aos serviços de saúde para seus segurados, o que contribuiu para a piora de indicadores de saúde da população. Quando a mobilização social obrigou a aumentar o controle sobre as EPS, estas começaram a sair do mercado declarando-se em falência, ou entrando subitamente em balanços financeiros negativos.