Abstract

http://ssrn.com/abstract=2022062
 


 



Systemic Risk in the Insurance Sector - A Review of General Issues and Some Findings on Large Insurers in Bermuda


Andreas (Andy) Jobst


International Monetary Fund (IMF) - Monetary and Capital Markets Department (MCM)

December 28, 2012

The Geneva Papers on Risk and Insurance - Issues and Practice (Forthcoming)

Abstract:     
The following paper reviews the recent regulatory efforts in defining systemic risk in the insurance sector and the designation of systemically important insurers. It also examines a suitable reference system of risk indicators in the context of identifying systemically important activities of Bermuda (re-)insurers - without considering the design and implementation of new prudential standards guiding supervisory treatment. This includes the assessment of identified vulnerabilities, such as non-traditional and/or non-insurance (NT-NI) risk transfer activities, which provides valuable insights into systemic risk analysis in the domestic context of an insurance market dominated by non-life underwriting. Although current evidence suggests that core insurance activities are unlikely to cause or propagate systemic risk, the characteristics and business models of insurance firms vary by country and require a more nuanced examination. Based on prudential data collected from the largest commercial (re-)insurance firms (Classes 4 and 3B), we find very little evidence of systemically important activities, which are commonly assumed to arise from NT-NI activities. However, further analysis of institutional linkages and concentration of both investments and liabilities is needed for a more comprehensive assessment of spillover effects, which can help inform the forward-looking assessment of system-wide vulnerabilities as an integral part of macroprudential surveillance.

Number of Pages in PDF File: 61

Keywords: financial crisis, insurance sector, investment, macroprudential, systemic risk, SIFI, G-SII

JEL Classification: G01, G18, G22

Accepted Paper Series


Download This Paper

Date posted: March 15, 2012 ; Last revised: June 27, 2013

Suggested Citation

Jobst, Andreas (Andy), Systemic Risk in the Insurance Sector - A Review of General Issues and Some Findings on Large Insurers in Bermuda (December 28, 2012). The Geneva Papers on Risk and Insurance - Issues and Practice (Forthcoming). Available at SSRN: http://ssrn.com/abstract=2022062 or http://dx.doi.org/10.2139/ssrn.2022062

Contact Information

Andreas A. Jobst (Contact Author)
International Monetary Fund (IMF) - Monetary and Capital Markets Department (MCM) ( email )
700 19th Street NW
Washington, DC 20431
United States
+1-202-623-6362 (Phone)
Feedback to SSRN


Paper statistics
Abstract Views: 879
Downloads: 169
Download Rank: 98,776

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.375 seconds