The Financial Benefit For Insurers : Mediate in Personal Injuries Disputes

Resolving insurance disputes can focus only on quantum. Where insurers adopt integrative solutions they can enjoy cost savings and higher customer satisfaction. An integratively managed process can expand the negotiation options. The potential inherent in plaintiff’s emotions to resolve matters on an emotional basis, rather than an economic one, is explored. Using research, the author demonstrates how mediations are more likely to obtain integrative outcomes than unmediated conferences. Using a combination of governmental reports, published studies and academic publications, the paper demonstrates how mediation is more likely to foster an environment where the parties communicate and cooperate. Research is employed to demonstrate where mediators can reduce hostilities, in circumstances where negotiating parties alone would likely fail. Generally the paper constructs an argument to support the proposition that mediation can offer insurers an effective mechanism to reduce costs and increase customer satisfaction. INTRODUCTION Mediation can offer insurers an effective mechanism to reduce costs and increase customer satisfaction. This paper will first demonstrate the differences between distributive and integrative outcomes. It is argued insurer’s interest can be far better served through obtaining an integrative solution. The paper explains how the mediator can assist both parties to obtain an integrative outcome. Simultaneously the paper explores the extreme difficulties conference participants face in obtaining an integrative outcome without a mediator in an adversarial climate. The mediator’s ability to assist in the facilitation of integrative information exchange, defuse hostilities and reality check expectations is discussed. The mediator’s ability to facilitate in this area is compared to the inability of conference participants to achieve similar results. This paper concludes, the potential financial benefit offered by integrative solutions, combined with the ability of mediation to deliver such outcomes where unmediated conferences cannot deliver, leads to the recommendation that insurers opt for a mediation to best serve their commercial interests.

Impeding good governance implementation in Indonesian regional government : the effect of a bureaucratic generation gap

The implementation of ‘good governance’ in Indonesia’s regional government sector became a central tenet in governance research following the introduction of the national code for governance in 2006. The code was originally drafted in 1999 as a response to the Asian financial crises and many cases of unearthed corruption, collusion, and nepotism. It was reviewed in 2001 and again in 2006 to incorporate relevant political, economical, and social developments. Even though the national code exists along with many regional government decrees on good governance, the extent of implementation of the tenets of good governance in Indonesia’s regional government is still questioned. Previous research on good governance implementation in Indonesian regional government (Mardiasmo, Barnes and Sakurai, 2008) identified differences in the nature and depth of implementation between various Indonesian regional governments. This paper analyses and extends this recent work and explores key factors that may impede the implementation and sustained application of governance practices across regional settings. The bureaucratic culture of Indonesian regional government is one that has been shaped for over approximately 30 years, in particular during that of the Soeharto regime. Previous research on this regime suggests a bureaucratic culture with a mix of positive and negative aspects. On one hand Soeharto’s regime resulted in strong development growth and strong economic fundamentals, resulting in Indonesia being recognised as one of the Asian economic tigers prior to the 1997 Asian financial crises. The financial crises however revealed a bureaucratic culture that was rife with corruption, collusion, and nepotism. Although subsequent Indonesian governments have been committed to eradicating entrenched practices it seems apparent that the culture is ingrained within the bureaucracy and eradication of it will take time. Informants from regional government agree with this observation, as they identify good governance as an innovative mechanism and to implement it will mean a deviation from the “old ways.” Thus there is a need for a “changed” mind set in order to implement sustained governance practices. Such an exercise has proven to be challenging so far, as there is “hidden” resistance from within the bureaucracy to change its ways. The inertia of such bureaucratic cultures forms a tension against the opportunity for the implementation of good governance. From this context an emergent finding is the existence of a ‘bureaucratic generation gap’ as an impeding variable to enhanced and more efficient implementation of governance systems. It was found that after the Asian financial crises the Indonesian government (both at national and regional level) drew upon a wider human resources pool to fill government positions – including entrants from academia, the private sector, international institutions, foreign nationals and new graduates. It suggested that this change in human capital within government is at the core of this ‘inter-generational divide.’ This divergence is exemplified, at one extreme, by [older] bureaucrats who have been in-position for long periods of time serving during the extended Soeharto regime. The “new” bureaucrats have only sat in their positions since the end of Asian financial crisis and did not serve during Soeharto’s regime. It is argued that the existence of this generation gap and associated aspects of organisational culture have significantly impeded modernising governance practices across regional Indonesia. This paper examines the experiences of government employees in five Indonesian regions: Solok, Padang, Gorontalo, Bali, and Jakarta. Each regional government is examined using a mixed methodology comprising of on-site observation, document analysis, and iterative semi-structured interviewing. Drawing from the experiences of five regional governments in implementing good governance this paper seeks to better understand the causal contexts of variable implementation governance practices and to suggest enhancements to the development of policies for sustainable inter-generational change in governance practice across regional government settings.

Financial accounting: building accounting knowledge

Financial Accounting: Building Accounting Knowledge is a new textbook written for the first financial accounting subject that a student majoring in accounting is required to study. Based on the successful introductory accounting textbook, 'Accounting: building business skills', this text will provide students and academics with a well written and accessible textbook on the principles of financial accounting, with ample illustrations and applications to business. The text maintains the balance between a 'user' and 'preparer' perspective effectively by integrating real financial information and business decision choices throughout the chapters. Through the use of real company information and financial statements students will quickly appreciate the use of accounting information. The textbook clearly outlines to students how accounting information communicates the financing, operating, and investing activities of a business. The text builds a strong conceptual understanding and develops skills in the application of accounting principles and techniques, providing students with a solid foundation for studying accounting.

An empirical study : a role of financial and non-financial performance measurement and perceived innovation effectiveness

Practitioners and academics often assume that investments in innovation will lead to organizational improvements. However, previous research has often shown that implemented innovations fail to realise these potential improvements. On the other hand, organisation, perhaps, has been growing and productive because of the innovation, but traditional measurements have failed to capture that growth. In order to help organizations capture their innovation performance effectively, this study examined the organizations which employ different types of performance measurement and their perception of innovation effectiveness.

National consumer credit laws, financial exclusion and interest rate caps : The case for diversity within a centralised framework

Australia is going through a major reform of consumer credit regulation, with the implementation of a proposal to transfer regulatory responsibility from the State and Territory Governments to the Commonwealth Government. While the broad policy approach is supported, the reform process has missed a significant opportunity to engage directly with issues of financial exclusion and with the potential role of regulation to reduce financial exclusion. The imposition of an interest rate cap can limit the impact of financial exclusion. However, the future of the existing interest rate caps is uncertain, given the diversity of approaches, and the heated debate that surrounds this issue. In the absence of support for regulatory initiatives to increase the availability of low cost, small loans, permitting regulatory diversity on this issue of interest rate caps, within an otherwise centralised regulatory framework., can minimise the impact of financial exclusion on consumers.

Stochastic modelling of financial time series with memory and multifractal scaling

Financial processes may possess long memory and their probability densities may display heavy tails. Many models have been developed to deal with this tail behaviour, which reflects the jumps in the sample paths. On the other hand, the presence of long memory, which contradicts the efficient market hypothesis, is still an issue for further debates. These difficulties present challenges with the problems of memory detection and modelling the co-presence of long memory and heavy tails. This PhD project aims to respond to these challenges. The first part aims to detect memory in a large number of financial time series on stock prices and exchange rates using their scaling properties. Since financial time series often exhibit stochastic trends, a common form of nonstationarity, strong trends in the data can lead to false detection of memory. We will take advantage of a technique known as multifractal detrended fluctuation analysis (MF-DFA) that can systematically eliminate trends of different orders. This method is based on the identification of scaling of the q-th-order moments and is a generalisation of the standard detrended fluctuation analysis (DFA) which uses only the second moment; that is, q = 2. We also consider the rescaled range R/S analysis and the periodogram method to detect memory in financial time series and compare their results with the MF-DFA. An interesting finding is that short memory is detected for stock prices of the American Stock Exchange (AMEX) and long memory is found present in the time series of two exchange rates, namely the French franc and the Deutsche mark. Electricity price series of the five states of Australia are also found to possess long memory. For these electricity price series, heavy tails are also pronounced in their probability densities. The second part of the thesis develops models to represent short-memory and longmemory financial processes as detected in Part I. These models take the form of continuous-time AR(∞) -type equations whose kernel is the Laplace transform of a finite Borel measure. By imposing appropriate conditions on this measure, short memory or long memory in the dynamics of the solution will result. A specific form of the models, which has a good MA(∞) -type representation, is presented for the short memory case. Parameter estimation of this type of models is performed via least squares, and the models are applied to the stock prices in the AMEX, which have been established in Part I to possess short memory. By selecting the kernel in the continuous-time AR(∞) -type equations to have the form of Riemann-Liouville fractional derivative, we obtain a fractional stochastic differential equation driven by Brownian motion. This type of equations is used to represent financial processes with long memory, whose dynamics is described by the fractional derivative in the equation. These models are estimated via quasi-likelihood, namely via a continuoustime version of the Gauss-Whittle method. The models are applied to the exchange rates and the electricity prices of Part I with the aim of confirming their possible long-range dependence established by MF-DFA. The third part of the thesis provides an application of the results established in Parts I and II to characterise and classify financial markets. We will pay attention to the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX), the NASDAQ Stock Exchange (NASDAQ) and the Toronto Stock Exchange (TSX). The parameters from MF-DFA and those of the short-memory AR(∞) -type models will be employed in this classification. We propose the Fisher discriminant algorithm to find a classifier in the two and three-dimensional spaces of data sets and then provide cross-validation to verify discriminant accuracies. This classification is useful for understanding and predicting the behaviour of different processes within the same market. The fourth part of the thesis investigates the heavy-tailed behaviour of financial processes which may also possess long memory. We consider fractional stochastic differential equations driven by stable noise to model financial processes such as electricity prices. The long memory of electricity prices is represented by a fractional derivative, while the stable noise input models their non-Gaussianity via the tails of their probability density. A method using the empirical densities and MF-DFA will be provided to estimate all the parameters of the model and simulate sample paths of the equation. The method is then applied to analyse daily spot prices for five states of Australia. Comparison with the results obtained from the R/S analysis, periodogram method and MF-DFA are provided. The results from fractional SDEs agree with those from MF-DFA, which are based on multifractal scaling, while those from the periodograms, which are based on the second order, seem to underestimate the long memory dynamics of the process. This highlights the need and usefulness of fractal methods in modelling non-Gaussian financial processes with long memory.

Are the financial services external complaints resolution schemes subject to judicial review?

In Australia seven schemes (apart from the Superannuation Complaints Tribunal) provide alternative dispute resolution services for complaints brought by consumers against financial services industry members. Recently the Supreme Court of New South Wales held that the decisions of one scheme were amenable to judicial review at the suit of a financial services provider member and the Supreme Court of Victoria has since taken a similar approach. This article examines the juristic basis for such a challenge and contends that judicial review is not available, either at common law or under statutory provisions. This is particularly the case since Financial Industry Complaints Service Ltd v Deakin Financial Services Pty Ltd (2006) 157 FCR 229; 60 ACSR 372 decided that the jurisdiction of a scheme is derived from a contract made with its members. The article goes on to contend that the schemes are required to give procedural fairness and that equitable remedies are available if that duty is breached.

Disclosing disclosure : new challenges for financial communicators

Stockmarket regulators in Australia, Canada and the United States have all issued recent challenges to listed companies on their disclosure practices, questioning in many cases what has been long standing practice. Financial public relations counsellors are constantly called up to advise on the communication consequences of difference disclosure strategies. This paper will explore the challenges, faced by a group of financial communicators within seven Australia listed companies, in setting and enacting disclosure polices for the organisations. It will identify hey issues involved in communicating within a regulated environment, as well as address the implications of new technology for future practice.

Financial incentives and advanced construction procurement systems

Construction clients often use financial incentives to encourage stakeholder motivation and commitment to voluntary higher-order project goals. Despite the increased use of financial incentives, there is little literature addressing means of optimizing outcomes. Using a case study methodology, the examination of a successful Australian construction project demonstrates the features of a positively geared procurement approach that promotes the effectiveness of financial incentives. The research results show that if the incentive system is perceived to be fair and is applied to reward exceptional performance, and not to manipulate, then contractors are more likely to be positively motivated.

Preliminary review of over-regulation in Australian financial services

This article examines a preliminary review and the limited evidence of over-regulation in Australian financial services. The 1997 Wallis Report and the CLERP 6 paper resulted in the amendments to Ch 7 of the Corporations Act 2001 (Cth) by the Financial Services Reform Act. Nearly a decade later the system based upon 'one-size fits all' dual track regime and a consistent licensing regime has greatly increased the costs of compliance. In the area of enforcement there has not been a dramatic change to the effective techniques applied by ASIC over other agencies such as APRA. In particular there are clear economic arguments, as well as international experiences which state that a single financial services regulator is more effective than the multi-layered approach adopted in Australia. Finally, in the superannuation area of financial services, which is worth A$800 billion there is unnecessary dual licensing and duplicated regulation with little evidence of any consumer-member benefit but at a much greater cost

The home stigma : adverse selection in ADRs and the home capital market environment

We investigate whether characteristics of the home country capital environment, such as information disclosure and investor rights protection continue to affect ADRs cross-listed in the U.S. Using microstructure measures as proxies for adverse selection, we find that characteristics of the home markets continue to be relevant, especially for emerging market firms. Less transparent disclosure, poorer protection of investor rights and weaker legal institutions are associated with higher levels of information asymmetry. Developed market firms appear to be affected by whether or not home business laws are common law or civil law legal origin. Our finding contributes to the bonding literature. It suggests that cross-listing in the U.S. should not be viewed as a substitute for improvement in the quality of local institutions, and attention must be paid to improve investor protection in order to achieve the full benefits of improved disclosure. Improvement in the domestic capital market environment can attract more investors even for U.S. cross-listed firms.

Incorporating sustainability measures in life-cycle financial decision making for highway construction

Public awareness and the nature of highway construction works demand that sustainability measures are first on the development agenda. However, in the current economic climate, individual volition and enthusiasm for such high capital investments do not present as strong cases for decision making as the financial pictures of pursuing sustainability. Some stakeholders consider sustainability to be extra work that costs additional money. Though, stakeholders realised its importance in infrastructure development. They are keen to identify the available alternatives and financial implications on a lifecycle basis. Highway infrastructure development is a complex rocess which requires expertise and tools to evaluate investment options, such as environmentally sustainable features for road and highway development. Life-cycle cost analysis (LCCA) is a valuable approach for investment decision making for construction works. However, LCCA applications in highway development are still limited. Current models, for example focus on economic issues alone and do not deal with sustainability factors, which are more difficult to quantify and encapsulate in estimation modules. This paper reports the research which identifies sustainability related factors in highway construction projects, in quantitative and qualitative forms of a multi-criteria analysis. These factors are then incorporated into past and proven LCCA models to produce a new long term decision support model. The research via questionnaire, model building, analytical hierarchy processes (AHP) and case studies have identified, evaluated and then processed highway sustainability related cost elements. These cost elements need to be verified by industry before being integrated for further development of the model. Then the Australian construction industry will have a practical tool to evaluate investment decisions which provide an optimum balance between financial viability and sustainability deliverables.

Housing supply in Australia : the impact of the availability of development finance

Before the Global Financial Crisis many providers of finance had growth mandates and actively pursued development finance deals as a way of gaining higher returns on funds with regular capital turnover and re-investment possible. This was able to be achieved through high gearing and low presales in a strong market. As asset prices fell, loan covenants breached and memories of the 1990’s returned, banks rapidly adjusted their risk appetite via retraction of gearing and expansion of presale requirements. Early signs of loosening in bank credit policy are emerging, however parties seeking development finance are faced with a severely reduced number of institutions from which to source funding. The few institutions that are lending are filtering out only the best credit risks by way of constrictive credit conditions including: low loan to value ratios, the corresponding requirement to contribute high levels of equity, lack of support in non-prime locations and the requirement for only borrowers with well established track records. In this risk averse and capital constrained environment, the ability of developers to proceed with real estate developments is still being constrained by their inability to obtain project finance. This paper will examine the pre and post GFC development finance environment. It will identify the key lending criteria relevant to real estate development finance and will detail the related changes to credit policies over this period. The associated impact to real estate development projects will be presented, highlighting the significant constraint to supply that the inability to obtain finance poses.