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Pricing
Catastrophe Insurance Derivatives with Stochastic Interest
Rates and Regime-Switching Jump Diffusion Losses
--Yang-Che Wu, Szu-Lang Liao and So-De Shyu
This
article introduces a regime-switching jump diffusion model
to capture the arrival and loss process for the catastrophic
loss index. Based on this model, we price catastrophe insurance
derivatives—the Property Claim Services (PCS) futures
call option, the PCS futures call spread and the default-free
catastrophe bond. Under a framework of incomplete markets,
and using non-traded CAT (catastrophe) loss indices, the existence
of a well-defined arbitrage-free price is shown, and the analytic
closed-form pricing formulas can be implemented via the fast
Fourier transform. We derive the hedging parameters, Delta,
Gamma and Rho, from these formulas. Further, the sensitivity
analysis of the parameters are conducted to study the effect
of these contingent claims valuation.
©
2008 The Icfai University Press. All Rights Reserved.
Insurance
Policy Management Practices Using XML
--Padma Srinivasan and Sashi Kumar
Insurance
policy management usually happens, based on the operational
and service requirements of the policyholders and Small and
Medium Enterprises (SMEs) in insurance policy claim management.
XML (Extensible Markup Language) is a "text-based mark-up
language which can be used for formatting the data either
for storage or transmission between and along computer networks".†
It has enabled the policyholders to service their policies
themselves and to go for a major outsourcing to Indian SMEs
that are into insurance claims processing. The operating model
of the insurance claims processing is mainly receipt of polices,
document management and settlement of claims. India has a
huge potential insurance market, and XML helps the policyholders
to access their policies faster and supports the insurance
companies to service their clients quickly with minimal cost.
The policyholders need to be supported and serviced
at the least time and cost, such that their purposes of risk
covering and investment propositions are optimized. This article
deliberates on the policy management by policyholders, insurance
companies and the insurance claims processors, using XML in
the process.
©
2008 The Icfai University Press. All Rights Reserved.
A
Study of Market Potential of ING Vysya Life Insurance Company
in Goa --Shekhar V Sawant and Filipe
Rodrigues e Melo
In
spite of the goodwill, trust and established network of the
government corporations, private insurance companies are gaining
their market share considerably in a very short tenure, and
this rapid change is observed in India. The private companies
focus on friendly approach and better service. This paper
aims at studying the market potential for ING Vysya Life Insurance
Company, one of the private insurance companies.
©
2008 The Icfai University Press. All Rights Reserved.
Continuous
Risk Improvement System: A Recipe of Success for the Insurance
Agent --Bani Kochar and Subhalaxmi
Mohapatra
The
wave of globalization has swept the world in its fold and
has brought about substantial changes in the world economy.
The insurance sector, too, has not been bereaved of these
changes, and there have been changes galore in the rising
Indian economy. As the term `insurance' suggests, it insures
one against the risks associated with life and belongings.
With the intensity and type of risks increasing, and the organizations
preferring flatter structures, the duties and responsibilities
of an agent have also increased manifold, from being a mere
seller of an insurance policy to being an advisor, friend
and confidante. Also, risks, being an integral constituent
of an insurance policy, there arises a need for a mechanism
to assess and monitor these risks. Against this backdrop,
a continuous risk improvement system is discussed here, which
can help mitigate and control the risks in the best possible
manner. This paper precisely deals with these issues mentioned
above.
©
2008 The Icfai University Press. All Rights Reserved.
Potential
for Life Insurance Companies in Indian Suburban Areas: A Special
Case of Suburban Areas in Faridabad District
--Sonia Singh
Acquiring
insurance involves extreme planning and consideration of many
factors like finances, one's future, and the use of the insurance
policies. These days, according to customers' needs, all kind
of insurance are available. Insurance companies have designed
not only life insurance, motor insurance, or health insurance,
but also marriage insurance to secure one's marriage. Moreover,
it is not centered in urban areas or around high income groups.
Due to liberalization, both private and public players have
been targeting people of every income group, offering them
attractive flexi plans, according to their needs, thanks to
the economic growth, with consumers of sophisticated differential
needs. The market for insurance products in low income communities,
especially in suburban areas, has an immense potential. No
doubt, there is a need for, may be a bank, an insurance company,
a development agency, or the government, to explore how the
poor households are exposed to risks and shocks, and how,
through insurance initiatives, they may be more able to manage
these risks better. Keeping in mind the need for the insurance
sector, an attempt has been made in this paper, to find out
the potential for insurance companies in suburban areas of
Delhi and NCR regions. For convenience, the study has been
restricted to Palwal and Ballabgarh, small towns in Faridabad
district.
©
2008 The Icfai University Press. All Rights Reserved.
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