Structural adjustment and change in the Australian life insurance industry post demutualization

Deregulation of financial markets has been an important platform for government policy in recent times. It has been a catalyst in the expansion of financial sector. The experience of Australian life insurers during this period represents an interesting case study into the impact of regulatory transition. The lifting of restrictions changed the institutional environment within which life insurers operated. In doing so it precipitated changes in strategies and organizational structures of these financial intermediaries. An information cost framework is used to analyse the consequences of deregulation and its implications for the Australian life insurance industry in emerging global financial markets.

Monitoring and motivating outworkers : the case of the AMP and the sale of industrial life insurance 1905-1940

The development of labor management practices in the financial services sector provides an interesting insight into how problems associated with agency issues were overcome. Within financial institutions and other white collar occupations, the use of internal labor markets emerged as an effective means of both controlling and motivating employees. However such management techniques were only effective in cases where work tasks could be internalized. The business of some types of organizations necessitated a division of work tasks between those undertaken within the office and those undertaken outside the office. The management and sale of insurance products is a case in point. This paper explores the development of processes implemented to resolve a specific type of labor management issue, namely the control of workers under conditions of uncertainty. Using the example of the Australian Mutual Provident (Australia's largest life insurer), it analyses how and why particular work relations procedures were developed.

The curious case of the Occidental and Regal : the evolution of solvency and disclosure standards in the Australian life insurance industry

In 1990, the Australian life insurance industry was rocked by a scandal that threatened to destabilize consumer confidence in the ability of insurance providers to meet policyholder liabilities. The incident highlighted the nature of the agency problems that arise when conditions of asymmetric information exist. It revealed systemic weaknesses in accounting, solvency and disclosure standards as they applied to life insurers. This article uses an evolutionary concept of agency to analyse government and industry responses to this event. It is argued that initial adaptive responses stabilized the industry and averted a more serious crisis. Longer term innovative responses led to the introduction of a new and more rigorous approach to reporting and solvency standards, which has improved information flows and agency outcomes.

Marketing the message: the making of the Market for Life Insurance in Australia, 1850–1940

During the late nineteenth century, sales of life insurance products in Australia increased at a rapid rate. An investigation of the way in which life insurance products were targeted to the consumers provides insights not only into the marketing approaches, but also the changing nature of the mutual organization. This article uses a “stages” approach to analyze the evolution of the marketing message. The experience of Australian mutual insurers suggests that marketing strategies, as with other types of organizational skills, evolve in response to both the prevailing business environment and the ability of the firm to acquire and implement new knowledge and ways of conducting business.

Non-monotone insurance contracts and their empirical consequences

The goal of this paper is to show the possibility of a non-monotone relation between coverage ans risk which has been considered in the literature of insurance models since the work of Rothschild and Stiglitz (1976). We present an insurance model where the insured agents have heterogeneity in risk aversion and in lenience (a prevention cost parameter). Risk aversion is described by a continuous parameter which is correlated with lenience and for the sake of simplicity, we assume perfect correlation. In the case of positive correlation, the more risk averse agent has higher cosr of prevention leading to a higher demand for coverage. Equivalently, the single crossing property (SCP) is valid and iplies a positive correlation between overage and risk in equilibrium. On the other hand, if the correlation between risk aversion and lenience is negative, not only may the SCP be broken, but also the monotonocity of contracts, i.e., the prediction that high (low) risk averse types choose full (partial) insurance. In both cases riskiness is monotonic in risk aversion, but in the last case there are some coverage levels associated with two different risks (low and high), which implies that the ex-ante (with respect to the risk aversion distribution) correlation between coverage and riskiness may have every sign (even though the ex-post correlation is always positive). Moreover, using another instrument (a proxy for riskiness), we give a testable implication to desentangle single crossing ans non single croosing under an ex-post zero correlation result: the monotonicity of coverage as a function os riskiness. Since by controlling for risk aversion (no asymmetric information), coverage is monotone function of riskiness, this also fives a test for asymmetric information. Finally, we relate this theoretical results to empirical tests in the recent literature, specially the Dionne, Gouruéroux and Vanasse (2001) work. In particular, they found an empirical evidence that seems to be compatible with asymmetric information and non single crossing in our framework. More generally, we build a hidden information model showing how omitted variables (asymmetric information) can bias the sign of the correlation of equilibrium variables conditioning on all observable variables. We show that this may be the case when the omitted variables have a non-monotonic relation with the observable ones. Moreover, because this non-dimensional does not capture this deature. Hence, our main results is to point out the importance of the SPC in testing predictions of the hidden information models.

Financial guarantees in Brazilian life insurance and pension plans

Recently regulated Brazilian life and pension products offer a benefit structure composed of minimum guaranteed annual rate, in°ation adjustment according to a price index and participation on an investment fund performance. We present a valuation model for these products. We establish a fair condition relationship between minimum guarantees and participation rates, and explore its behavior over a space of maturities, interest rates, and also fund and price index volatilities and correlation. Besides consistency to reference models, we found that the effect of the fund volatility is conditioned to the price index volatility level and the correlation between them.

The secondary market for life insurance policies in the United States market evolution and product valuation

In this work we discuss the secondary market for life insurance policies in the United States of America. First, we give an overview of the life settlement market: how it came into existence, its growth prospects and the ethical issues it arises. Secondly, we discuss the characteristics of the different life insurance products present in the market and describe how life settlements are originated. Life settlement transactions tend to be long and complex transactions that require the involvement of a number of parties. Also, a direct investment into life insurance policies is fraught with a number of practical issues and entails risks that are not directly related to longevity. This may reduce the efficiency of a direct investment in physical policies. For these reasons, a synthetic longevity market has evolved. The number of parties involved in a synthetic longevity transaction is typically smaller and the broker-dealer transferring the longevity exposure will be retaining most or all of the risks a physical investment entails. Finally, we describe the main methods used in the market to evaluate life settlement investments and the role of life expectancy providers.

Is computer-assisted telephone triage safe? A prospective surveillance study in walk-in patients with non-life-threatening medical conditions

Background Patients often establish initial contact with healthcare institutions by telephone. During this process they are frequently medically triaged. Purpose To investigate the safety of computer-assisted telephone triage for walk-in patients with non-life-threatening medical conditions at an emergency unit of a Swiss university hospital. Methods This prospective surveillance study compared the urgency assessments of three different types of personnel (call centre nurses, hospital physicians, primary care physicians) who were involved in the patients' care process. Based on the urgency recommendations of the hospital and primary care physicians, cases which could potentially have resulted in an avoidable hazardous situation (AHS) were identified. Subsequently, the records of patients with a potential AHS were assessed for risk to health or life by an expert panel. Results 208 patients were enrolled in the study, of whom 153 were assessed by all three types of personnel. Congruence between the three assessments was low. The weighted κ values were 0.115 (95% CI 0.038 to 0.192) (hospital physicians vs call centre), 0.159 (95% CI 0.073 to 0.242) (primary care physicians vs call centre) and 0.377 (95% CI 0.279 to 0.480) (hospital vs primary care physicians). Seven of 153 cases (4.57%; 95% CI 1.85% to 9.20%) were classified as a potentially AHS. A risk to health or life was adjudged in one case (0.65%; 95% CI 0.02% to 3.58%). Conclusion Medical telephone counselling is a demanding task requiring competent specialists with dedicated training in communication supported by suitable computer technology. Provided these conditions are in place, computer-assisted telephone triage can be considered to be a safe method of assessing the potential clinical risks of patients' medical conditions.

Life-threatening versus non-life-threatening manual strangulation: are there appropriate criteria for MR imaging of the neck?

The aim of the study was to determine objective radiological signs of danger to life in survivors of manual strangulation and to establish a radiological scoring system for the differentiation between life-threatening and non-life-threatening strangulation by dividing the cross section of the neck into three zones (superficial, middle and deep zone). Forensic pathologists classified 56 survivors of strangulation into life-threatening and non-life-threatening cases by history and clinical examination alone, and two blinded radiologists evaluated the MRIs of the neck. In 15 cases, strangulation was life-threatening (27%), compared with 41 cases in which strangulation was non-life-threatening (73%). The best radiological signs on MRI to differentiate between the two groups were intramuscular haemorrhage/oedema, swelling of platysma and intracutaneous bleeding (all p = 0.02) followed by subcutaneous bleeding (p = 0.034) and haemorrhagic lymph nodes (p = 0.04), all indicating life-threatening strangulation. The radiological scoring system showed a sensitivity and specificity of approximately 70% for life-threatening strangulation, when at least two neck zones were affected. MRI is not only helpful in assessing the severity of strangulation, but is also an excellent documentation tool that is even admissible in court.

Twenty-five years of health progress; a study of the mortality experience among the industrial policyholders of the Metropolitan Life Insurance Company 1911 to 1935,

Mode of access: Internet.

The Goss-Udderzook tragedy : being a history of a strange case of deception and murder, including the great life insurance case, and the trial of William E. Udderzook for the murder of W. S. Goss.

Spine title: Trial of Udderzook.