Systemic Risk and the U.S. Insurance Sector
40 Pages Posted: 20 Aug 2014
There are 2 versions of this paper
Systemic Risk and the U.S. Insurance Sector
Date Written: September 2014
Abstract
This article examines the potential for the U.S. insurance industry to cause systemic risk events that spill over to other segments of the economy. We examine primary indicators of systemic risk as well as contributing factors that exacerbate vulnerability to systemic events. Evaluation of systemic risk is based on a detailed financial analysis of the insurance industry, its role in the economy, and the interconnectedness of insurers. The primary conclusion is that the core activities of U.S. insurers do not pose systemic risk. However, life insurers are vulnerable to intrasector crises, and both life and property–casualty insurers are vulnerable to reinsurance crises. Noncore activities such as financial guarantees and derivatives trading may cause systemic risk, and interconnectedness among financial institutions has grown significantly in recent years. To reduce systemic risk from noncore activities, regulators need to continue efforts to strengthen mechanisms for insurance group supervision.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Systemic Risk and Regulation of the U.S. Insurance Industry
By J David Cummins and Mary A. Weiss
-
Systemic Risk and Regulation of the U.S. Insurance Industry
By J David Cummins and Mary A. Weiss
-
Systemic Risk and the Inter-Connectedness between Banks and Insurers: An Econometric Analysis
By Hua Chen, J David Cummins, ...
Systemic Risk and the U.S. Insurance Sector
This is a Wiley-Blackwell Publishing paper. Wiley-Blackwell Publishing charges $42.00 .
File name: JORI.pdf
Size: 0K
If you wish to purchase the right to make copies of this paper for distribution to others, please select the quantity.
