Insurance and actuarial studies Books

Book SynopsisDrawing on examples ranging from military history to the business world, a retired four-star general in the U.S. Army offers a battle-tested system for detecting and responding to risk, showing that there are in fact ten dimensions of control we can adjust at any given time.

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Book SynopsisFeaturing contributions from industry and academia, this volume includes chapters covering a diverse range of theoretical and empirical aspects of actuarial science and quantitative finance, including portfolio management, derivative valuation, risk theory and the economics of insurance. Developed from the First International Congress on Actuarial Science and Quantitative Finance, held at the Universidad Nacional de Colombia in Bogotá in June 2014, this volume highlights different approaches to issues arising from industries in the Andean and Carribean regions. Contributions address topics such as Reverse mortgage schemes and urban dynamics, modeling spot price dynamics in the electricity market, and optimizing calibration and pricing with SABR models.Table of ContentsModeling Electricity Spot Price Dynamics by Using Levy-Type Cox Processes: An Application to the Colombian Market.- Using Value-at-Risk (VaR) to Measure Market Risk of the Equity Inventory of a Market Maker.- Reverse mortgage schemes financing urban dynamics using the multiple decrement approach.- Speedup of Calibration and Pricing with SABR models: from equities to interest rates derivatives.- Bergman, Piterbarg and Beyond: Pricing Derivatives under Collateralization and Differential Rates.

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Book Synopsis'Embracing risk' offers an original approach to risk, insurance and responsibility, the provocative and wide-ranging essays demonstrate that risk has moved well beyond its origins in the insurance trade to become a central organizing principle of social and cultural life.

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Book SynopsisCharts the social and cultural life of private insurance in postwar America, showing how insurance institutions and actuarial practices played crucial roles in bringing social, political, and economic neoliberalism into everyday life. Actuarial thinking is everywhere in contemporary America, an often unnoticed byproduct of the postwar insurance industry's political and economic influence. Calculations of risk permeate our institutions, influencing how we understand and manage crime, education, medicine, finance, and other social issues. Caley Horan's remarkable book charts the social and economic power of private insurers since 1945, arguing that these institutions' actuarial practices played a crucial and unexplored role in insinuating the social, political, and economic frameworks of neoliberalism into everyday life. Analyzing insurance marketing, consumption, investment, and regulation, Horan asserts that postwar America's obsession with safety and security fueled the exponential expansion of the insurance industry and the growing importance of risk management in other fields. Horan shows that the rise and dissemination of neoliberal values did not happen on its own: they were the result of a project to unsocialize risk, shrinking the state's commitment to providing support, and heaping burdens upon the people often least capable of bearing them. Insurance Era is a sharply researched and fiercely written account of how and why private insurance and its actuarial market logic came to be so deeply lodged in American visions of social welfare.Trade Review“Insurance Era brilliantly captures the power that insurance came to hold over Americans’ relationship to risk, security, themselves, and one another in the twentieth century. No other book better explains how and why the private triumphed over the public, and the individual over the collective, in recent American life. With great historical imagination, Horan has utterly recast the history of the postwar United States as the origins of our own time.” * Jonathan Ira Levy, University of Chicago *“History at its best raises fundamental questions: What is fair? Who is responsible for whom? And who gets to decide? Insurance Era is such a history, exposing the central role the private insurance industry played in answering those questions for twentieth-century Americans. As Horan shows, the industry used its huge capital resources to underwrite suburban development and drain cities of their tax bases; it shaped who had access to insurance, who was excluded from such security, and the consequences of that exclusion. Most importantly, the industry conditioned Americans to think of risk pools as objective and apolitical, a matter of personal responsibility. We continue to live in this insurance era, but in uncovering its history, Horan opens a pathway to a more egalitarian vision of human community.” * Barbara Young Welke, University of Minnesota *“The insurance industry promised to provide Americans with much-needed security, but as Horan shows in this brilliant new book, its efforts only heightened the risk of individuals and deepened patterns of discrimination for marginalized groups, paving the way for the insecurities of the neoliberal age.” * Kevin M. Kruse, Princeton University *"Recommended. . . Horan covers the insurance industry's evolution since the 1930s, a time when the public sector appeared poised to dominate the provision of insurance and an underexplored era in US risk management. . . . The book will therefore interest social, cultural, and business historians." * Choice *"A useful and timely account of the postwar insurance industry’s efforts to promote self-made security and the logic of actuarial fairness upon which that form of security depends. . . In keeping with much of the insurance and society literature to which Horan makes a worthy contribution, Insurance Era is thoroughly interdisciplinary, engaging with work by sociologists, legal scholars, and political scientists." * Journal of Interdisciplinary History *"The insurance industry has been a discrete yet powerful actor in modern capitalist societies. Insurance Era skillfully dissects its role in privatizing security, investing in the built environment, and reproducing discrimination in the United States from the 1930s to the 1970s. It is a welcome addition to the field of American insurance history." * Enterprise and Society *"Horan makes an important contribution to a growing literature on insurance history. Insurance Era also makes a potentially dry subject come vibrantly alive by situating economic ideas in their cultural contexts and weaving legal and social theory into the historical narrative. Horan’s clear and beautiful language propels her readers through her deep dive into the archive of insurance operations and excavation of complicated actuarial concepts. Ultimately, she shows how private insurance taught Americans to conceive of themselves and others in actuarial terms, transformed the built environment, fractured social identities, and deepened socio-economic inequalities." * Jotwell *"In this book Caley Horan explores the marketing, investment, and underwriting practices of the insurance industry in the United States, with a particular focus on events after World War II. . . . Horan’s thought-provoking book asks a good question: what is the role of flawed experience rating in reinforcing discrimination, and how can the problem be fixed?" * EH.net *Table of ContentsIntroduction Part I: Selling “Self-Made” Security Chapter 1: Insurance Marketing in the Wake of the New Deal Chapter 2: “Facing the Future’s Risks”: Governing through Education and Public Service Part II: Investing in Privatization Chapter 3: “Public Enterprises in Private Hands”: Investing in Urban Renewal Chapter 4: “A Mighty Pump”: Financing Suburbanization Part III: Defending Discrimination Chapter 5: “Communities without Hope”: Urban Crisis and Insurance Redlining Chapter 6: The Unisex Insurance Debate and the Triumph of Actuarial Fairness Epilogue: Imagining Insurance Futures Acknowledgments Notes Index

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Book SynopsisRebecca Elliott explores how families, communities, and governments confront problems of loss as the climate changes. She offers the first in-depth account of the politics and social effects of the U.S. National Flood Insurance Program, in an incisive consideration of the dilemmas of moral economy underlying insurance.Trade ReviewIn this essential book, Rebecca Elliott narrates the history of the individualization of risk through an unlikely lens: the de-mutualization of flood insurance in the United States. As rising global temperatures wreak havoc on the climate, those living in the path of storms are increasingly left to deal with the consequences on their own. This is a rich and deeply human story about people and organizations going underwater, learning to make sense of loss and to become ‘resilient’—until the next wave. -- Marion Fourcade, author of Economists and Societies: Discipline and Profession in the United States, Britain, and France, 1890s to 1990sUnderwater is a masterpiece of social and historical analysis, revealing the increasingly powerful and contested role of the insurance industry—through its rationalities, technologies, and moral economy—in an age of climate crisis. It opens on the impossible decision so many of us facing climate-driven catastrophes in the places we live must now make: to retreat or to remain. As Elliot shows in incisive, often painful detail, these decisions force us to reckon with multiple forms of loss—some measured in our ties to buildings, communities, landscapes, and ways of life, others in the dollar amounts of our insurance coverage and housing investments. These vital reckonings, meanwhile, differ depending on where we live, whether we own our homes, and how 'deserving' we are perceived to be—all variables profoundly shaped by race and class. Elliott compellingly situates these struggles within an emergent 'politics of loss'—itself the flip-side of ever more inadequate politics of sustainability. Disparities and precarities driven both by policy and escalating hazard have ushered in an engaged, often enraged 'climate public,' and wrought havoc in the insurance industry itself. Through this brilliant, moving, and elegantly written analysis, we see a space opening for radical reimagining. What if we reject the devolution of risk and individualizing logics of insurance and housing markets, and recognize our collective interdependence? Elliott leaves us with a crucial understanding: there can be no safer ground if we go it alone. -- Miriam Greenberg, coauthor of Crisis Cities: Disaster and Redevelopment in New York and New OrleansIn this lucidly written and brilliantly argued book, Rebecca Elliott takes us from the flooded basements of victims of Hurricane Sandy in New York—and we could add the West Coast aflame as I write—to a powerful cultural conflict standing between us and an urgently needed fix. Flood insurance. Premium costs. Risk classification. Zoning. Building standards. Buried in the ‘administrative decisions’ within each realm are momentous questions. Should the government step out and leave owners with deeply devalued homes, ‘free’ to rebuild at their own risk? Or, on the other hand, should the government bear the cost of climate denial when financial obligations spike high and flames and floods are upon us? This is a highly important book arriving at a crucial hour. Read it and pass it on. -- Arlie Russell Hochschild, author of Strangers in Their Own Land: Anger and Mourning on the American Right, a finalist for the National Book AwardUnderwater is a tragically timely, subtly scary, and completely essential book about living with loss in a climate-changed world. Elliott brings a sophisticated sociological perspective and a compassionate ethnographic eye to debates over how we protect ourselves and our neighbors as the ground shifts beneath our feet. A major contribution. -- Eric Klinenberg, author of Palaces for the People: How Social Infrastructure Can Help Fight Inequality, Polarization, and the Decline of Civic LifeUnderwater explores how Americans directly affected by storms like Hurricane Sandy have been forced to confront the impact climate change has on their homes, families, and communities. This path-breaking study shows that the terrain of these discussions, centered on struggles over arcane issues like insurance and flood maps, raises deeply political and moral questions about who should pay for and be responsible for the impacts of what will certainly be steadily worsening events. -- Neil Fligstein, University of California, BerkeleyThere is clearly a lot here for economic sociologists, as well as for scholars of natural disasters, cities and the built environment, and risk and insurance. * American Journal of Sociology *Table of ContentsAcknowledgmentsTimeline of EventsIntroduction: Insurance and the Problem of Loss in a Climate-Changed United States1. Transforming the Management of Loss: The Origins of the National Flood Insurance Program2. Losing Ground: Values at Risk in an American Floodplain3. Visions of Loss: Knowing and Pricing Flood Risk4. Shifting Responsibilities for Loss: National Reform of Flood Insurance5. Floodplain Futures: Trajectories of LossConclusion: What Do We Have to Lose?Methodological AppendixNotesIndex

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Book SynopsisThere are plenty of books on specialized risk topics but few that deal with the broad diversity and daily applicability of this subject. Risk applications require a robust knowledge of many attributes of this seemingly simple subject. This book teaches the reader through examples and case studies the fundamental (and subtle) aspects of risk - regardless of the specific situation. The text allows the reader to understand the concept of risk analysis while not getting too involved in the mathematics; in this method the reader can apply these techniques across a wide range of situations. The second edition includes new examples from NASA and several other industries as well as new case studies from legal databases. The many real-life discussion topics enable the reader to form an understanding of the concepts of risk and risk management and apply them to day-to-day issues.Table of ContentsPreface ix Acknowledgments xi 1. Risk: Life’s Question Mark 1 2. Measurement: The Alchemist’s Base 15 3. Statistics: Numbers Looking for an Argument 41 4. The Value of Life and Limb, Statistically Speaking 69 5. The Evolution of Risk 93 6. Frequency and Severity: Weighing the Risk 107 7. What’s in a Risk? Perception Creates Risk Reality 128 8. Risk, Regulation, and Reason 151 9. Earth, Air, and Water: The Not-So-Bare Essentials 176 10. Food . . . for Thought 210 11. Flying: The Not-So-Wild Blue Yonder 249 12. Risk on the Roads 278 13. An Incomplete List of Life’s Risks 315 Index 337

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Book SynopsisThis book provides a thorough analysis of internal rating systems. Two case studies are devoted to building and validating statistical-based models for borrowers' ratings, using SPSS-PASW and SAS statistical packages. Mainstream approaches to building and validating models for assigning counterpart ratings to small and medium enterprises are discussed, together with their implications on lending strategy. Key Features: Presents an accessible framework for bank managers, students and quantitative analysts, combining strategic issues, management needs, regulatory requirements and statistical bases. Discusses available methodologies to build, validate and use internal rate models. Demonstrates how to use statistical packages for building statistical-based credit rating systems. Evaluates sources of model risks and strategic risks when using statistical-based rating systems in lending. This book will prove to be of great value to banTable of ContentsPreface xi About the authors xiii 1 The emergence of credit ratings tools 1 2 Classifications and key concepts of credit risk 5 2.1 Classification 5 2.1.1 Default mode and value-based valuations 5 2.1.2 Default risk 6 2.1.3 Recovery risk 7 2.1.4 Exposure risk 8 2.2 Key concepts 8 2.2.1 Expected losses 8 2.2.2 Unexpected losses, VAR, and concentration risk 9 2.2.3 Risk adjusted pricing 13 3 Rating assignment methodologies 17 3.1 Introduction 17 3.2 Experts-based approaches 19 3.2.1 Structured experts-based systems 19 3.2.2 Agencies’ ratings 22 3.2.3 From borrower ratings to probabilities of default 26 3.2.4 Experts-based internal ratings used by banks 31 3.3 Statistical-based models 32 3.3.1 Statistical-based classification 32 3.3.2 Structural approaches 34 3.3.3 Reduced form approaches 38 3.3.4 Statistical methods: linear discriminant analysis 41 3.3.5 Statistical methods: logistic regression 54 3.3.6 From partial ratings modules to the integrated model 58 3.3.7 Unsupervised techniques for variance reduction and variables’ association 60 3.3.8 Cash flow simulations 73 3.3.9 A synthetic vision of quantitative-based statistical models 76 3.4 Heuristic and numerical approaches 77 3.4.1 Expert systems 78 3.4.2 Neural networks 81 3.4.3 Comparison of heuristic and numerical approaches 85 3.5 Involving qualitative information 86 4 Developing a statistical-based rating system 93 4.1 The process 93 4.2 Setting the model’s objectives and generating the dataset 96 4.2.1 Objectives and nature of data to be collected 96 4.2.2 The time frame of data 96 4.3 Case study: dataset and preliminary analysis 97 4.3.1 The dataset: an overview 97 4.3.2 Duplicate cases analysis 103 4.3.3 Missing values analysis 104 4.3.4 Missing value treatment 107 4.3.5 Other preliminary overviews 109 4.4 Defining an analysis sample 114 4.4.1 Rationale for splitting the dataset into an analysis sample and a validation sample 114 4.4.2 How to split the dataset into an analysis sample and a validation sample 114 4.5 Univariate and bivariate analyses 116 4.5.1 Indicators’ economic meanings, working hypotheses and structural monotonicity 117 4.5.2 Empirical assessment of working hypothesis 130 4.5.3 Normality and homogeneity of variance 137 4.5.4 Graphical analysis 140 4.5.5 Discriminant power 145 4.5.6 Empirical monotonicity 157 4.5.7 Correlations 160 4.5.8 Analysis of outliers 162 4.5.9 Transformation of indicators 164 4.5.10 Summary table of indicators and short listing 177 4.6 Estimating a model and assessing its discriminatory power 184 4.6.1 Steps and case study simplifications 184 4.6.2 Linear discriminant analysis 185 4.6.3 Logistic regression 210 4.6.4 Refining models 216 4.7 From scores to ratings and from ratings to probabilities of default 229 5 Validating rating models 237 5.1 Validation profiles 237 5.2 Roles of internal validation units 239 5.3 Qualitative and quantitative validation 241 5.3.1 Qualitative validation 242 5.3.2 Quantitative validation 249 6 Case study: Validating PanAlp Bank’s statistical-based rating system for financial institutions 257 6.1 Case study objectives and context 257 6.2 The ‘Development report’ for the validation unit 258 6.2.1 Shadow rating approach for financial institutions 258 6.2.2 Missing value analysis 259 6.2.3 Interpreting financial ratios for financial institutions and setting working hypotheses 260 6.2.4 Monotonicity 263 6.2.5 Analysis of means 263 6.2.6 Assessing normality of distributions: histograms and normal Q–Q plots 263 6.2.7 Box plots analysis 266 6.2.8 Normality tests 267 6.2.9 Homogeneity of variance tests 269 6.2.10 F-ratio and F-Test 270 6.2.11 ROC curves 270 6.2.12 Correlations 270 6.2.13 Outliers 270 6.2.14 Short listing and linear discriminant analysis 272 6.3 The ‘Validation report’ by the validation unit 274 7 Ratings usage opportunities and warnings 285 7.1 Internal ratings: critical to credit risk management 285 7.2 Internal ratings assignment trends 289 7.3 Statistical-based ratings and regulation: conflicting objectives? 291 7.4 Statistical-based ratings and customers: needs and fears 295 7.5 Limits of statistical-based ratings 298 7.6 Statistical-based ratings and the theory of financial intermediation 305 7.7 Statistical-based ratings usage: guidelines 310 Bibliography 315 Index 321

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Book SynopsisComplete profiles of today's most successful annuities. Expert tips on how to maximize your returns. Variable annuities now outpace mutual funds as the number one choice among street-smart investors--and it's easy to see why.Table of ContentsALL ABOUT ANNUITIES. What Is a Variable Annuity?. How an Annuity Works. How to Invest in a Variable Annuity. Reading a Variable Annuity Prospectus. THE 100 BEST SUBACCOUNTS. How the 100 Best Subaccounts Were Determined. About the 100 Best Subaccounts. Aggressive Growth Subaccounts. Balanced Subaccounts. Corporate Bond Subaccounts. Global Stock Subaccounts. Government Bond Subaccounts. Growth Subaccounts. Growth and Income Subaccounts. High-Yield Bond Subaccounts. Metals Subaccounts. Specialty Subaccounts. Utility Stock Subaccounts. World Bond Subaccounts. Glossary of Annuity Terms. About the Author.

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Book SynopsisStochastic Processes for Insurance and Finance offers a thorough yet accessible reference for researchers and practitioners of insurance mathematics. Building on recent and rapid developments in applied probability, the authors describe in general terms models based on Markov processes, martingales and various types of point processes. Discussing frequently asked insurance questions, the authors present a coherent overview of the subject and specifically address: The principal concepts from insurance and finance Practical examples with real life data Numerical and algorithmic procedures essential for modern insurance practices Assuming competence in probability calculus, this book will provide a fairly rigorous treatment of insurance risk theory recommended for researchers and students interested in applied probability as well as practitioners of actuarial sciences. Wiley Series in Probability and StatisticsTrade Review"...an excellent text..." -- Australian & New Zealand Journal of StatisticsTable of ContentsTable of Contents: Concepts from Insurance and Finance. Probability Distributions. Premiums and Ordering of Risks. Distributions of Aggregate Claim Amount. Risk Processes. Renewal Processes and Random Walks. Markov Chains. Continuous-Time Markov Models. Martingale Techniques I. Martingale Techniques II. Piecewise Deterministic Markov Processes. Point Processes. Diffusion Models. Distribution Tables. References. Index.

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Book SynopsisTrade Review“Timely — and, frankly, sometimes shocking. . . . Ultimate Price exposes a system rife with troubling assumptions and inequality that reduces each human to a data point. Well-written and readable, the book avoids being overly academic while still presenting a meticulously researched argument of why we all should take the time to understand how our own lives are priced.” * BuzzFeed *“Price tags on human lives are everywhere.” -- Kai Ryssdal, * Marketplace *“Should be required reading for anyone sitting down to watch the evening news." * New Books Network *"To ration resources and seek to re-open businesses, accountants have to assign price tags to life. . . . In Ultimate Price, a detailed analysis of how government organisations and corporations define the monetary value of human life, Howard Friedman tours the uncomfortable architecture of this calculus." * The Spectator *"Friedman argues that we must devise more equitable ways to assign value to human life. . . . Readers are exhorted to understand how lives are priced so that they might demand better formulas." * Science *“Provides a concise review of some of the scientific literature on valuing life including some of the moral issues one must consider when making these judgments. . . . Certainly worth a read for those looking to learn more on this interesting topic.” * Healthcare Economist *"Very clear and well-informed. It has loads of thought-provoking examples."
 * Enlightened Economist *“Looks deeply into the structurally problematic factors that impact the price tags Americans are given for our lives.”
 * Hacking Finance *“A reflection and criticism of the data cult of contemporary technological bureaucracy.” * First Financial Network *“In meticulous detail, Friedman shows that not all lives are valued equally, that social and economic inequalities are often reproduced and compounded in how we calculate the value of any one life . . . . Friedman draws a vivid picture of how uneven power, competing interests, and social and economic inequality influence how we value life.” * Literary Review of Canada *“Thank you, Howard Steven Friedman, for providing invaluable information, insights, and counsel that will help those who read your book to have a wider and deeper impact on efforts NOT to value all people equally; rather, to value all people fairly ​'​so that human rights and human lives are always protected.​'" ​ * BobMorris: Blogging on Business *"Friedman’s tour through the value of life is an excellent work for those willing to dip their toes into these regulatory waters without drowning in the scholarship." * Regulation *“He has succeeded admirably in his aim of providing a non-technical and comprehensive presentation of the salient issues that will prove useful to concerned citizens and policy analysts in the health sector alike.” * Economic Record *“Incredibly engaging reading. It deals with an extremely sensitive topic, but is written delicately, with sensitivity, with respect for human life.” * Dziennik Gazeta Prawna * "Friedman, who is an American statistician and health economist, argues compellingly that the way in which governments place a monetary value on human life is 'neither transparent nor fair'." * Economic Affairs *"Provides a comprehensive introduction to the prices put on human life and a corresponding critical assessment of the methods routinely used to do so. It forces us to reflect not only on how critical price tags are in everyday life but also on what they convey about society’s values."
 * Health Affairs *"A clear and useful introduction." * European Legacy *"The author has a great thesis and is true throughout the book calling for equity in fairness in human valuation." * Social Science Journal *"[Friedman] has succeeded admirably in his aim of providing a non-technical and comprehensive presentation of the salient issues that will prove useful to concerned citizens and policy analysts in the health sector alike." * Economic Record *"This is an important book." * Journal of Economics *"Social science researchers would find this book a worthwhile read for broadening their perspective on the many ways society values lives." * Journal of Health Politics, Policy, and Law *Table of Contents1. Your Money or Your Life? 2. When the Towers Fell 3. Justice Is Not Blind 4. A Little More Arsenic in Your Water 5. Maximizing Profits at Whose Expense? 6. I Want to Die the Way Grandpa Did 7. To Be Young Again 8. Can We Afford a Little One? 9. Broken Calculators 10. What’s Next? Notes Further Reading Acknowledgments Index

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Book SynopsisHow much is a human life worth? Individuals, families, companies, and governments routinely place a price on human life. The calculations that underlie these price tags are often buried in technical language, yet they influence our economy, laws, behaviors, policies, health, and safety. These price tags are often unfair, infused as they are with gender, racial, national, and cultural biases that often result in valuing the lives of the young more than the old, the rich more than the poor, whites more than blacks, Americans more than foreigners, and relatives more than strangers. This is critical since undervalued lives are left less-protected and more exposed to risk. Howard Steven Friedman explains in simple terms how economists and data scientists at corporations, regulatory agencies, and insurance companies develop and use these price tags and points a spotlight at their logical flaws and limitations. He then forcefully argues against the rampant unfairness in the system. ReadersTrade Review“Timely — and, frankly, sometimes shocking. . . . Ultimate Price exposes a system rife with troubling assumptions and inequality that reduces each human to a data point. Well-written and readable, the book avoids being overly academic while still presenting a meticulously researched argument of why we all should take the time to understand how our own lives are priced.” * BuzzFeed *“Price tags on human lives are everywhere.” -- Kai Ryssdal, * Marketplace *“Should be required reading for anyone sitting down to watch the evening news." * New Books Network *"To ration resources and seek to re-open businesses, accountants have to assign price tags to life. . . . In Ultimate Price, a detailed analysis of how government organisations and corporations define the monetary value of human life, Howard Friedman tours the uncomfortable architecture of this calculus." * The Spectator *"Friedman argues that we must devise more equitable ways to assign value to human life. . . . Readers are exhorted to understand how lives are priced so that they might demand better formulas." * Science *“Provides a concise review of some of the scientific literature on valuing life including some of the moral issues one must consider when making these judgments. . . . Certainly worth a read for those looking to learn more on this interesting topic.” * Healthcare Economist *"It is a serious understatement to say that this is a thought-provoking volume. . . . [Friedman] calls our attention to the problems we ought not ignore." * Public Health Ethics *Table of Contents1. Your Money or Your Life? 2. When the Towers Fell 3. Justice Is Not Blind 4. A Little More Arsenic in Your Water 5. Maximizing Profits at Whose Expense? 6. I Want to Die the Way Grandpa Did 7. To Be Young Again 8. Can We Afford a Little One? 9. Broken Calculators 10. What’s Next? Notes Further Reading Acknowledgments Index

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Book SynopsisPresents an overview of financial risk modeling, with a focus on practical applications, empirical reality, and historical perspective. Covering the mean-variance analysis and the capital asset pricing model, this title offers an account of factor models, which are the key to successful risk analysis in every economic climate.Trade Review"Thorough and well-cited, this is a comprehensive treatment of techniques for portfolio risk management. It provides a unique perspective, from the fundamentals to practical applications. There are few books that cover this material in this particular way."—Christopher L. Culp, author of Structured Finance and Insurance"The range of topics is wide and the coverage is deep. An impressive book."—Peter Christoffersen, McGill University"The conceptual framework of this book is presented in a lucid and clear manner. The treatment is mathematically rigorous where it matters, without ever becoming pedantic and without cutting corners."—Riccardo Rebonato, Royal Bank of Scotland"This book takes major steps forward in the crucially important area of portfolio risk measurement, making significant strides toward incorporating industry and country risk, as well as macroeconomic, FX, credit, transactions cost, and liquidity risks. It will be an essential reference text for academics, central bankers, and others in the financial services industry."—Francis X. Diebold, University of PennsylvaniaTable of ContentsAcknowledgments xi Introduction xiii Key Notation xix Chapter 1: Measures of Risk and Return 1 1.1 Measuring Return 1 1.2 The Key Portfolio Risk Measures 6 1.3 Risk-Return Preferences and Portfolio Optimization 12 1.4 The Capital Asset Pricing Model and Its Applications to Risk Analysis 23 1.5 The Objectives and Limitations of Portfolio Risk Analysis 31 Chapter 2: Unstructured Covariance Matrices 36 2.1 Estimating Return Covariance Matrices 36 2.2 The Error-Maximization Problem 47 2.3 Portfolio Choice as Decision Making under Uncertainty 54 Chapter 3: Industry and Country Risk 61 3.1 Industry-Country Component Models 61 3.2 Empirical Evidence on the Relative Magnitudes of Country and Industry Risks 73 3.3 Sector-Currency Models of Corporate Bond Returns 77 Chapter 4: Statistical Factor Analysis 79 4.1 Types of Factor Models 79 4.2 Approximate Factor Models 82 4.3 The Arbitrage Pricing Theory 86 4.4 Small-n Estimation Methods 88 4.5 Large-n Estimation Methods 93 4.6 Number of Factors 98 Chapter 5: The Macroeconomy and Portfolio Risk 101 5.1 Estimating Macroeconomic Factor Models 101 5.2 Event Studies of Macroeconomic Announcements 110 5.3 Macroeconomic Policy Endogeneity 112 5.4 Business Cycle Betas 115 5.5 Empirical Fit and the Relative Value of Macroeconomic Factor Models 116 Chapter 6: Security Characteristics and Pervasive Risk Factors 117 6.1 Equity and Fixed-Income Characteristics 117 6.2 Characteristic-Based Factor Models of Equities 122 6.3 The Fama-French Model and Extensions 130 6.4 The Semiparametric Approach to Characteristic-Based Factor Models 132 Chapter 7: Measuring and Hedging Foreign Exchange Risk 134 7.1 Definitions of Foreign Exchange Risk 134 7.2 Optimal Currency Hedging 142 7.3 Currency Covariances with Stock and Bond Returns 149 7.4 Macroeconomic Influences on Currency Returns 151 Chapter 8: Integrated Risk Models 155 8.1 Global and Regional Integration Trends 155 8.2 Risk Integration across Asset Classes 158 8.3 Segmented Asset Allocation and Security Selection 159 8.4 Integrated Risk Models 162 Chapter 9: Dynamic Volatilities and Correlations 167 9.1 GARCH Models 167 9.2 Stochastic Volatility Models 178 9.3 Time Aggregation 180 9.4 Downside Correlation 181 9.5 Option-Implied Volatility 184 9.6 The Volatility Term Structure at Long Horizons 187 9.7 Time-Varying Cross-Sectional Dispersion 188 Chapter 10: Portfolio Return Distributions 191 10.1 Characterizing Return Distributions 191 10.2 Estimating Return Distributions 196 10.3 Tail Risk 203 10.4 Nonlinear Dependence between Asset Returns 207 Chapter 11: Credit Risk 212 11.1 Agency Ratings and Factor Models of Spread Risk 213 11.2 Rating Transitions and Default 217 11.3 Credit Instruments 218 11.4 Conceptual Approaches to Credit Risk 220 11.5 Recovery at Default 232 11.6 Portfolio Credit Models 232 11.7 The 2007-8 Credit-Liquidity Crisis 238 Chapter 12: Transaction Costs and Liquidity Risk 241 12.1 Some Basic Terminology 241 12.2 Measuring Transactions Cost 246 12.3 Statistical Properties of Liquidity 261 12.4 Optimal Trading Strategies and Transaction Costs 266 Chapter 13: Alternative Asset Classes 271 13.1 Nonsynchronous Pricing and Smoothed Returns 271 13.2 Time-Varying Risk, Nonlinear Payoff, and Style Drift 284 13.3 Selection and Survivorship Biases 291 13.4 Collectibles: Measuring Return and Risk with Infrequent and Error-Prone Observations 295 13.5 Summary 298 Chapter 14: Performance Measurement 299 14.1 Return-Based Performance Measurement 299 14.2 Holdings-Based Performance Measurement and Attribution 303 14.3 Volatility Forecast Evaluation 309 14.4 Value-at-Risk Hit Rates 316 14.5 Forecast and Realized Return Densities 317 Chapter 15: Conclusion 319 15.1 Some Key Messages 319 15.2 Questions for Future Research 320 References 323 Index 345

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Book SynopsisInforming American Health Care Policy provides a critical perspective on the National Medical ExpAnditure Surveys (NMES) and how these surveys have responded to the sometimes conflicting challenges of policy and research.Trade Review"... Informing American Health Care Policy is a useful, evenentertaining book for anyone who uses health data or who wants tounderstand the history and evolution of expAnditure surveys."(Health Affairs May/June 2000) "In this important book, the lead researchers associated with NMESdescribe the development of this rich data source and, in a seriesof well-crafted papers, illustrate the use of these data ininforming major areas of health policy. It is a must-read foranyone interested in American health policy-especially for youngerprofessionals entering this growing field." (Uwe E. Reinhardt,James Madison Professor of Political Economy, PrincetonUniversity) "National health expenditure surveys have provided policymakerswith the information they need to make informed decisions. Thisvolume tells us about the evolution and contributions of thefederal government's most ambitious health care survey. I recommAndit for those interested in improving the quality of data availableto those who formulate policy." (John K. Iglehart, founding editor,Health Affairs) "I enjoyed reading this book. Thanks to the major investment inhealth expAnditure and insurance surveys and the increasinglysophisticated analytic capacity described in this volume, policyofficials now have a much more precise and up-to-date understandingof the implications of policy choices." (Karen Davis, president,The Commonwealth Fund; developed President Carter's 1977 nationalhealth reform proposal) "Thoughtful and informed reflections on the lessons learned byNMES. Provides sound guidance and procedures required to addressthe Anduring policy questions of Who's covered? Who pays?, and Howmuch? in the emerging U.S. health care environment of the future."(Lu Ann Aday, professor of behavioral sciences and management andpolicy sciences, the University of Texas School of Public Health;and author, Designing and Conducting Health Surveys, FourthEdition)Table of ContentsForeword. Preface and Acknowledgments. The Editors. The Contributors. Introduction (A. Monheit & R. Wilson). PAST CHALLLENGES AND CURRENT ISSUES. National Medical ExpAnditure Surveys: Genesis and Rationale (R.Andersen & O. Anderson). Modeling Consumer and Provider Behavior: The First NationalExpenditure Study (G. Wilensky). The Provider System and the Changing Locus of Expenditure Data:Survey Strategies from Fee-for-Service to Managed Care (J. Cohen& A. Taylor). SOURCES OF PAYMENT AND THE STRUCTURE OF HEALTH INSURANCE. Examining Health Insurance Differences: Issues of Public Equity andCost Efficiency (P. Short). Health Insurance, Employment, and the Labor Market (A.Monheit). VULNERABLE POPULATIONS: HEALTH CARE AND MEASURES OF ACCESS. The National ExpAnditure Surveys and Studies of Access to Care byVulnerable Populations (M. Berk). Evaluating Medicare and Medicaid: The Yield in Information from theNational Medical Expenditure Surveys (J. Kasper). SURVEY METHODS, BUDGET CONSTRAINTS, AND OPERATIONAL ISSUES. Better Estimates of Populations at Risk and More EfficientSampling: Changing Survey Design Strategies over Time (S.Cohen). Continuity Versus Change: Challenges in Designing a SuccessorSurvey (D. Walden). Survey Integration and End-of-Century Constraints (R.Arnett). THE ROLE OF NATIONAL DATA IN POLICY FORMULATION. Health System Reform Debates and Medical Expenditure Surveys (L.Nichols). Name Index. Subject Index.

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Book SynopsisThis study explores the policy options a provincial government might consider in extending health care coverage to the purchase of prescription drugs and dental care. It examines the major public policy objectives involved, such as spreading risk, redistributing wealth, and reducing the barriers to care, and evaluates alternative programs in terms of their costs and efficiency as well as their realization of the basic social objectives of health care. Using varied statistics, some drawn from schemes in other provinces, it estimates what different packages of pharmacare and denticare would have cost in Ontario in 1975. The results indicate that universal coverage may be one of the most costly and least effective options. Based on current modes of service delivery, a universal pharmacare and denticare program would transfer wealth to upper income groups without significantly improving the utilization of health care services.A study of drug manufacturing and retailing systems in

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Book SynopsisWhether man-made or naturally occurring, large-scale disasters can cause fatalities and injuries, devastate property and communities, savage the environment, impose significant financial burdens on individuals and firms, and test political leadership. Moreover, global challenges such as climate change and terrorism reveal the interdependent and interconnected nature of our current moment: what occurs in one nation or geographical region is likely to have effects across the globe. Our information age creates new and more integrated forms of communication that incur risks that are difficult to evaluate, let alone anticipate. All of this makes clear that innovative approaches to assessing and managing risk are urgently required.When catastrophic risk management was in its inception thirty years ago, scientists and engineers would provide estimates of the probability of specific types of accidents and their potential consequences. Economists would then propose risk management poliTrade Review"Extraordinarily thoughtful and insightful, the authors of The Future of Risk Management provide students and professionals in the field of risk management new pathways for approaches and solutions to our myriad areas of risk. Moreover, anyone interested in understanding the risks our societies face should study these essays." * Franklin W. Nutter, President, Reinsurance Association of America *"The field of risk management has exploded in recent decades as natural disasters, financial meltdowns, pandemics, and other damaging events have wreaked havoc across borders. The Future of Risk Management brings together essays from leading thinkers on ways to reduce risk so that today's threats do not turn into tomorrow's catastrophes. Aimed at policy leaders seeking strategies to reduce future harm, this volume deserves a close read and a spot on the bookshelf of all forward-thinking decision-makers." * Alice Hill, The Hoover Institution, Stanford University *"The Future of Risk Management engages in a critical discussion on how we as a nation and the world as a whole should better prepare for and reduce the costs of future disasters. The authors correctly recognize that our current disaster preparedness and response paradigm is fundamentally broken-plagued by inconsistencies, short-sightedness, and a lack of integration. Instead, we need to take a holistic, long-term approach to disaster response and risk management and allocate resources based on the best objective data available." * Jason M. Tuber, U.S. Congressional Staffer *"This comprehensive, critical, and lucid survey demonstrates convincingly that effectively managing climate change and other major threats requires understanding how the average person reacts to risk. It's a story about lessons learned and lessons forgotten, about logic and bias, about positive incentives and perverse incentives-and serves as a warning that we have a long, long way to go before we manage risk effectively." * Michael Oppenheimer, Princeton University *Table of ContentsIntroduction —Howard Kunreuther, Robert J. Meyer, and Erwann O. Michel-Kerjan PART I. BEHAVIORAL FACTORS INFLUENCING DECISION-MAKING UNDER RISK AND UNCERTAINTY Chapter 1. The Arithmetic of Compassion and the Future of Risk Management —Paul Slovic and Daniel Västfjäll Chapter 2. "Risk as Feelings" and "Perception Matters": Psychological Contributions on Risk, Risk-Taking, and Risk Management —Elke U. Weber Chapter 3. Risk-Based Thinking —Baruch Fischhoff Chapter 4. Structured Empirical Analysis of Decisions Under Natural Hazard Risk —Craig E. Landry, Gregory Colson, and Mona Ahmadiani Chapter 5. Mixing Rationality and Irrationality in Insurance Demand and Supply —Mark Pauly Chapter 6. The Disaster Cycle: What We Do Not Learn from Experience —Robert J. Meyer PART II. IMPROVING RISK ASSESSMENT Chapter 7. Using Models to Set a Baseline and Measure Progress in Reducing Disaster Casualties —Robert Muir-Wood Chapter 8. Learning from All Types of Near-Misses —Robin Dillon Chapter 9. Managing Systemic Industry Risk: The Need for Collective Leadership —Paul J. H. Schoemaker Chapter 10. Measuring Economic Resilience: Recent Advances and Future Priorities —Adam Rose PART III. DEVELOPING BETTER RISK COMMUNICATION STRATEGIES Chapter 11. Improving Stakeholder Engagement for Upstream Risks —Robin Gregory and Nate Dieckmann Chapter 12. Improving the Accuracy of Geopolitical Risk Assessments —Barbara A. Mellers, Philip E. Tetlock, Joshua D. Baker, Jeffrey A. Friedman, and Richard Zeckhauser Chapter 13. Efficient Warnings, Not "Wolf or Puppy" Warnings —Lisa A. Robinson, W. Kip Viscusi, and Richard Zeckhauser PART IV. ROLE OF RISK MITIGATION, RISK-SHARING, AND INSURANCE Chapter 14. Threats to Insurability —Carolyn Kousky Chapter 15. The Role of Insurance in Risk Management for Natural Disasters: Back to the Future —Howard Kunreuther Chapter 16. Improving Individual Flood Preparedness Through Insurance Incentives —W. J. Wouter Botzen Chapter 17. Strong and Well-Enforced Building Codes as an Effective Disaster Risk Reduction Tool: An Evaluation —Jeffrey Czajkowski PART V. GOVERNMENT AND RISK MANAGEMENT Chapter 18. Getting the Blend Right: Public-Private Partnerships in Risk Management —Cary Coglianese Chapter 19. The Regulation of Insurance Markets Subject to Catastrophic Risks —Robert W. Klein Chapter 20. Rethinking Government Disaster Relief in the United States: Evidence and a Way Forward —Erwann O. Michel-Kerjan List of Contributors Index

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Book SynopsisTrade Review"Extraordinarily thoughtful and insightful, the authors of The Future of Risk Management provide students and professionals in the field of risk management new pathways for approaches and solutions to our myriad areas of risk. Moreover, anyone interested in understanding the risks our societies face should study these essays." * Franklin W. Nutter, President, Reinsurance Association of America *"The field of risk management has exploded in recent decades as natural disasters, financial meltdowns, pandemics, and other damaging events have wreaked havoc across borders. The Future of Risk Management brings together essays from leading thinkers on ways to reduce risk so that today's threats do not turn into tomorrow's catastrophes. Aimed at policy leaders seeking strategies to reduce future harm, this volume deserves a close read and a spot on the bookshelf of all forward-thinking decision-makers." * Alice Hill, The Hoover Institution, Stanford University *"The Future of Risk Management engages in a critical discussion on how we as a nation and the world as a whole should better prepare for and reduce the costs of future disasters. The authors correctly recognize that our current disaster preparedness and response paradigm is fundamentally broken-plagued by inconsistencies, short-sightedness, and a lack of integration. Instead, we need to take a holistic, long-term approach to disaster response and risk management and allocate resources based on the best objective data available." * Jason M. Tuber, U.S. Congressional Staffer *"This comprehensive, critical, and lucid survey demonstrates convincingly that effectively managing climate change and other major threats requires understanding how the average person reacts to risk. It's a story about lessons learned and lessons forgotten, about logic and bias, about positive incentives and perverse incentives-and serves as a warning that we have a long, long way to go before we manage risk effectively." * Michael Oppenheimer, Princeton University *Table of ContentsIntroduction —Howard Kunreuther, Robert J. Meyer, and Erwann O. Michel-Kerjan PART I. BEHAVIORAL FACTORS INFLUENCING DECISION-MAKING UNDER RISK AND UNCERTAINTY Chapter 1. The Arithmetic of Compassion and the Future of Risk Management —Paul Slovic and Daniel Västfjäll Chapter 2. "Risk as Feelings" and "Perception Matters": Psychological Contributions on Risk, Risk-Taking, and Risk Management —Elke U. Weber Chapter 3. Risk-Based Thinking —Baruch Fischhoff Chapter 4. Structured Empirical Analysis of Decisions Under Natural Hazard Risk —Craig E. Landry, Gregory Colson, and Mona Ahmadiani Chapter 5. Mixing Rationality and Irrationality in Insurance Demand and Supply —Mark Pauly Chapter 6. The Disaster Cycle: What We Do Not Learn from Experience —Robert J. Meyer PART II. IMPROVING RISK ASSESSMENT Chapter 7. Using Models to Set a Baseline and Measure Progress in Reducing Disaster Casualties —Robert Muir-Wood Chapter 8. Learning from All Types of Near-Misses —Robin Dillon Chapter 9. Managing Systemic Industry Risk: The Need for Collective Leadership —Paul J. H. Schoemaker Chapter 10. Measuring Economic Resilience: Recent Advances and Future Priorities —Adam Rose PART III. DEVELOPING BETTER RISK COMMUNICATION STRATEGIES Chapter 11. Improving Stakeholder Engagement for Upstream Risks —Robin Gregory and Nate Dieckmann Chapter 12. Improving the Accuracy of Geopolitical Risk Assessments —Barbara A. Mellers, Philip E. Tetlock, Joshua D. Baker, Jeffrey A. Friedman, and Richard Zeckhauser Chapter 13. Efficient Warnings, Not "Wolf or Puppy" Warnings —Lisa A. Robinson, W. Kip Viscusi, and Richard Zeckhauser PART IV. ROLE OF RISK MITIGATION, RISK-SHARING, AND INSURANCE Chapter 14. Threats to Insurability —Carolyn Kousky Chapter 15. The Role of Insurance in Risk Management for Natural Disasters: Back to the Future —Howard Kunreuther Chapter 16. Improving Individual Flood Preparedness Through Insurance Incentives —W. J. Wouter Botzen Chapter 17. Strong and Well-Enforced Building Codes as an Effective Disaster Risk Reduction Tool: An Evaluation —Jeffrey Czajkowski PART V. GOVERNMENT AND RISK MANAGEMENT Chapter 18. Getting the Blend Right: Public-Private Partnerships in Risk Management —Cary Coglianese Chapter 19. The Regulation of Insurance Markets Subject to Catastrophic Risks —Robert W. Klein Chapter 20. Rethinking Government Disaster Relief in the United States: Evidence and a Way Forward —Erwann O. Michel-Kerjan List of Contributors Index

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Book SynopsisSet at a health insurance company dubbed Acme, this book chronicles how the privatization of the health care system in Puerto Rico transformed the experience of accessing and providing care on the island. Through interviews and participant observation, it explores the everyday contexts in which market reforms were enacted.Trade ReviewA persuasive account and `insiders view of how Managed Care really works. Managed Care, Jessica Mulligan argues, is really `ungovernable care. The assumption that `rational consumers can exercise `choice ignores the way ordinary people understand and deal with their health care issues. `Consumers see themselves as retired workers, mothers, or those who have chronic diseases like diabetes. `Choice is bewildering or limited. `Satisfaction boils down to surveys that code statements like `I cant complain and omit narratives about struggles to get better care. Mulligan argues we need to diagnose these ills that characterize neoliberal models of healthcare reform before we can work to change them. -- Louise Lamphere,Distinguished Professor of Anthropology Emerita, University of New MexicoA telling ethnography of the privatization of health care in Puerto Rico. Written from within the system of managed care, Mulligans impressive understanding of historical, cultural, economic, entrepreneurial, and moral aspects of reform paints a troubling picture of what is wrong with market approaches to care. Clear, timely, and insightful, Unmanageable Care contributes importantly to the medical anthropology of health care. It also goes beyond that to illustrate the limits and failures of market approaches to manage caregiving that are regularly overlooked by health policy experts with unfortunate results. An important book! -- Arthur Kleinman, M.D.,Esther and Sidney Rabb Professor of Anthropology, Harvard UniversityMulligan does an excellent job of, as she puts it, & tak[ing] seriously the potential of market-based solutions to reducing healthcare costs.While methodologically appealing to anthropologists, this book also has broader implications for those seeking healthcare solutions for disadvantaged populations in resource-constrained settings. * American Anthropologist *Table of ContentsContents Acknowledgments ix Introduction: Learning to Manage 1 Part I: Elements of a System 1. A History of Reform: Colonialism, Public Health, and Privatized Care 312. Regulating a Runaway Train: Everyone Is Replaceable 61 3. New Consumer Citizens: Life Histories 89 Part II: The Business of Care: Market Values and Management Strategies 4. Quality: Managing by Numbers 125 5. Complaints: The Wrong Glucometer ... Again! 151 6. Market Values: Partnering and Choice 179 Conclusion: Ungovernability as Market Rule 209 Appendix 1: A Methodological Appendix 231 Appendix 2: Interview Descriptions 241 Notes 253 Works Cited 277 Index 295 About the Author 299

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Book SynopsisThis timely two-volume collection successfully combines economically-oriented legal scholarship on insurance with policy-relevant economics scholarship on insurance.Trade Review‘Often considered quite diverse, law and economics impact on the insurance industry in almost equal measure, which means that this copiously footnoted two-volume work, with its extensive bibliographies, will offer perspectives on the economic implications of the law which will be useful to insurance lawyers, economists, academics and graduate students alike.’ -- Phillip Taylor MBE and Elizabeth Taylor, The Barrister MagazineTable of ContentsContents: Acknowledgements Introduction Daniel Schwarcz PART I INFORMATION ASYMMETRIES IN THE LAW AND ECONOMICS OF INSURANCE A. Adverse Selection 1. Amy Finkelstein and James Poterba (2002), ‘Selection Effects in the United Kingdom Individual Annuities Market’ 2. Peter Siegelman (2004), ‘Adverse Selection in Insurance Markets: An Exaggerated Threat’ B. Moral Hazard 3. Alma Cohen and Rajeev Dehejia (2004), ‘The Effect of Automobile Insurance and Accident Liability Laws on Traffic Fatalities’ 4. Tom Baker (1996), ‘On the Genealogy of Moral Hazard’ PART II INTERPRETING, REGULATING AND ENFORCING INSURANCE POLICIES A. Interpreting and Construing Insurance Policies 5. Kenneth S. Abraham (1996), ‘A Theory of Insurance Policy Interpretation’ 6. Michelle E. Boardman (2006), ‘Contra Proferentem: Allure of Ambiguous Boilerplate’ B. Regulating the Content of Insurance Policies 7. Russell Korobkin (1999), ‘The Efficiency of Managed Care “Patient Protection” Laws: Incomplete Contracts, Bounded Rationality, and Market Failure’ 8. Daniel Schwarcz (2007), ‘A Products Liability Theory for the Judicial Regulation of Insurance Policies’ C. Bad Faith Breach of Contract 9. Alan O. Sykes (1996), ‘”Bad Faith” Breach of Contract by First Party Insurers’ PART III LIABILITY INSURANCE A. The Desirability of Liability Insurance 10. Steven Shavell (1982), ‘On Liability and Insurance’ 11. George L. Priest (1989), ‘Insurability and Punitive Damages’ B. The Duty to Settle 12. Kent D. Syverud (1990), ‘The Duty to Settle’ 13. Alan O. Sykes (1994), ‘Judicial Limitations on the Discretion of Liability Insurers to Settle or Litigate: An Economic Critique’ C. The Impact of Liability Insurance 14. Tom Baker and Sean J. Griffith (2007), ‘The Missing Monitor in Corporate Governance: The Directors' & Officers' Liability Insurer’ 15. Kathryn Zeiler, Charles Silver, Bernard Black, David Hyman and William M. Sage (2007), ‘Physicians’ Insurance Limits and Malpractice Payments: Evidence From Texas Closed Claims, 1990–2003’ Volume II: Acknowledgements Introduction An introduction by the editor appears in Volume I PART I REGULATING INSURANCE MARKETS A. The Structure of Insurance Regulation 1. Jonathan R. Macey and Geoffrey P. Miller (1993), ‘The McCarran-Ferguson Act of 1945: Reconceiving the Federal Role in Insurance Regulation’ 2. Martin F. Grace and Richard D. Phillips (2007), ‘The Allocation of Governmental Regulatory Authority: Federalism and the Case of Insurance Regulation’ B. Solvency Regulation 3. J. David Cummins, Scott E. Harrington and Robert Klein (1995), ‘Insolvency Experience, Risk-Based Capital, and Prompt Corrective Action in Property-Liability Insurance’ 4. Scott E. Harrington (2005), ‘Capital Adequacy in Insurance and Reinsurance’ C. Regulation and Risk Classification 5. Kenneth S. Abraham (1985), ‘Efficiency and Fairness in Insurance Risk Classification’ 6. Michael Hoy and Michael Ruse (2005), ‘Regulating Genetic Information in Insurance Markets’ D. Price Regulation in Insurance Markets 7. Henry Grabowski, W. Kip Viscusi and William N. Evans (1989), ‘Price and Availability Tradeoffs of Automobile Insurance Regulation’ 8. Mary A. Weiss, Sharon Tennyson and Laureen Regan (2010), ‘The Effects of Regulated Premium Subsidies on Insurance Costs: An Empirical Analysis of Automobile Insurance’ 9. Dwight M. Jaffee and Thomas Russell (2002), ‘Regulation of Automobile Insurance in California’ E. Regulation and Insurance Policy Renewal 10. Mark V. Pauly, Howard Kunreuther and Richard Hirth (1995), ‘Guaranteed Renewability in Insurance’ 11. Ronen Avraham and K.A.D. Camara (2007), ‘The Tragedy of the Human Commons’ F. Regulating Insurance Demand 12. Kyle D. Logue (2001), ‘The Current Life Insurance Crisis: How the Law Should Respond’ 13. Daniel Schwarcz (2010), ‘Regulating Consumer Demand in Insurance Markets’ PART II PUBLIC VS. PRIVATE INSURANCE MARKETS A. Tort Law as Insurance 14. Richard A. Epstein (1985), ‘Products Liability as an Insurance Market’ 15. Jon D. Hanson and Kyle D. Logue (1990), ‘The First-Party Insurance Externality: An Economic Justification for Enterprise Liability’ 16. Kenneth S. Reinker and David Rosenberg (2007), ‘Unlimited Subrogation: Improving Medical Malpractice Liability by Allowing Insurers to Take Charge’ B. Government Role in Catastrophe Insurance 17. Dwight M. Jaffee and Thomas Russell (1997), ‘Catastrophe Insurance, Capital Markets, and Uninsurable Risks’ 18. J. David Cummins (2006), ‘Should the Government Provide Insurance for Catastrophes?’ 19. Howard Kunruether and Mark Pauly (2006), ‘Rules Rather than Discretion: Lessons from Hurricane Katrina’

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Book SynopsisTrade Review‘Richard Liskov has performed a valuable service in condensing and simplifying insurance regulation for those who have little familiarity with the subject. His book is essential reading for any lawyer with a client who is in the U.S. insurance marketplace or wants to be, any law student with an interest in how financial services are regulated in the U.S., and any insurance professional whose company is, or someday may be, under U.S. regulation.’ -- James Corcoran, Former Superintendent of Insurance for the State of New York, US‘This book provides a comprehensive overview of insurance regulation in the US. It should be required reading for all US insurance regulatory attorneys (and US insurance regulators as well). Equally important, it will prove to be a valuable resource for EU and UK attorneys who have insurance clients doing business, or who want to do business, in the US.’ -- Frederic M. Garsson, Saul Ewing LLP, US‘Insurance touches each of us in our daily lives. Having served as New York’s Attorney General for fifteen years, I know that Richard Liskov’s book is a valuable guide for lawyers, law students and those engaged in the insurance business in the United States – or indeed anyone interested in how insurance is regulated. It should be on everyone’s bookshelf.’ -- Robert Abrams, Former Attorney General of New York, USTable of ContentsContents: 1 An overview of U.S. insurance regulation and some key definitions 2 The respective roles of state and federal governments in U.S. insurance regulation 3 How state insurance departments are organized and operate 4 How states define what “insurance” is and who is an insurer, and how states license insurance companies and insurance professionals 5 How states monitor the financial condition of licensed insurance companies 6 How U.S. state insurance regulators deal with financially troubled insurance companies 7 How state insurance regulators supervise the market conduct of insurance companies and insurance professionals 8 How the U.S. federal government and state insurance regulators supervise health insurance 9 U.S. insurance regulation heading into the global technological future Index

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Book SynopsisA one-stop guide for the theories, applications, and statistical methodologies essential to operational risk Providing a complete overview of operational risk modeling and relevant insurance analytics, Fundamental Aspects of Operational Risk and Insurance Analytics: A Handbook of Operational Risk offers a systematic approach that covers the wide range of topics in this area. Written by a team of leading experts in the field, the handbook presents detailed coverage of the theories, applications, and models inherent in any discussion of the fundamentals of operational risk, with a primary focus on Basel II/III regulation, modeling dependence, estimation of risk models, and modeling the data elements. Fundamental Aspects of Operational Risk and Insurance Analytics: A Handbook of Operational Risk begins with coverage on the four data elements used in operational risk framework as well as processing risk taxonomy. The book then goes further Table of ContentsPreface xvii Acronyms xix List of Distributions xxi 1 OpRisk in Perspective 1 1.1 Brief History 1 1.2 Risk-Based Capital Ratios for Banks 5 1.3 The Basic Indicator and Standardized Approaches for OpRisk 9 1.4 The Advanced Measurement Approach 10 1.4.1 Internal Measurement Approach 11 1.4.2 Score Card Approach 11 1.4.3 Loss Distribution Approach 12 1.4.4 Requirements for AMA 13 1.5 General Remarks and Book Structure 16 2 OpRisk Data and Governance 17 2.1 Introduction 17 2.2 OpRisk Taxonomy 17 2.2.1 Execution, Delivery, and Process Management 19 2.2.2 Clients, Products, and Business Practices 21 2.2.3 Business Disruption and System Failures 22 2.2.4 External Frauds 23 2.2.5 Internal Fraud 23 2.2.6 Employment Practices and Workplace Safety 24 2.2.7 Damage to Physical Assets 25 2.3 The Elements of the OpRisk Framework 25 2.3.1 Internal Loss Data 26 2.3.2 Setting a Collection Threshold and Possible Impacts 26 2.3.3 Completeness of Database (Under-reporting Events) 27 2.3.4 Recoveries and Near Misses 27 2.3.5 Time Period for Resolution of Operational Losses 28 2.3.6 Adding Costs to Losses 28 2.3.7 Provisioning Treatment of Expected Operational Losses 28 2.4 Business Environment and Internal Control Environment Factors (BEICFs) 29 2.4.1 Risk Control Self-Assessment (RCSA) 29 2.4.2 Key Risk Indicators 31 2.5 External Databases 33 2.6 Scenario Analysis 34 2.7 OpRisk Profile in Different Financial Sectors 37 2.7.1 Trading and Sales 37 2.7.2 Corporate Finance 38 2.7.3 Retail Banking 38 2.7.4 Insurance 39 2.7.5 Asset Management 40 2.7.6 Retail Brokerage 42 2.8 Risk Organization and Governance 43 2.8.1 Organization of Risk Departments 44 2.8.2 Structuring a Firm Wide Policy: Example of an OpRisk Policy 46 2.8.3 Governance 47 3 Using OpRisk Data for Business Analysis 48 3.1 Cost Reduction Programs in Financial Firms 49 3.2 Using OpRisk Data to Perform Business Analysis 53 3.2.1 The Risk of Losing Key Talents: OpRisk in Human Resources 53 3.2.2 OpRisk in Systems Development and Transaction Processing 54 3.3 Conclusions 58 4 Stress-Testing OpRisk Capital and the Comprehensive Capital Analysis and Review (CCAR) 59 4.1 The Need for Stressing OpRisk Capital Even Beyond 99.9% 59 4.2 Comprehensive Capital Review and Analysis (CCAR) 60 4.3 OpRisk and Stress Tests 68 4.4 OpRisk in CCAR in Practice 70 4.5 Reverse Stress Test 75 4.6 Stressing OpRisk Multivariate Models—Understanding the Relationship Among Internal Control Factors and Their Impact on Operational Losses 76 5 Basic Probability Concepts in Loss Distribution Approach 79 5.1 Loss Distribution Approach 79 5.2 Quantiles and Moments 85 5.3 Frequency Distributions 88 5.4 Severity Distributions 89 5.4.1 Simple Parametric Distributions 90 5.4.2 Truncated Distributions 92 5.4.3 Mixture and Spliced Distributions 93 5.5 Convolutions and Characteristic Functions 94 5.6 Extreme Value Theory 97 5.6.1 EVT—Block Maxima 98 5.6.2 EVT—Random Number of Losses 99 5.6.3 EVT—Threshold Exceedances 100 6 Risk Measures and Capital Allocation 102 6.1 Development of Capital Accords Base I, II and III 103 6.2 Measures of Risk 106 6.2.1 Coherent and Convex Risk Measures 107 6.2.2 Comonotonic Additive Risk Measures 109 6.2.3 Value-at-Risk 109 6.2.4 Expected Shortfall 114 6.2.5 Spectral Risk Measure 120 6.2.6 Higher-Order Risk Measures 122 6.2.7 Distortion Risk Measures 125 6.2.8 Elicitable Risk Measures 126 6.2.9 Risk Measure Accounting for Parameter Uncertainty 130 6.3 Capital Allocation 133 6.3.1 Coherent Capital Allocation 134 6.3.2 Euler Allocation 136 6.3.3 Standard Deviation 138 6.3.4 Expected Shortfall 139 6.3.5 Value-at-Risk 140 6.3.6 Allocation by Marginal Contributions 142 6.3.7 Numerical Example 143 7 Estimation of Frequency and Severity Models 146 7.1 Frequentist Estimation 146 7.1.1 Parameteric Maximum Likelihood Method 149 7.1.2 Maximum Likelihood Method for Truncated and Censored Data 151 7.1.3 Expectation Maximization and Parameter Estimation 152 7.1.4 Bootstrap for Estimation of Parameter Accuracy 156 7.1.5 Indirect Inference–Based Likelihood Estimation 157 7.2 Bayesian Inference Approach 159 7.2.1 Conjugate Prior Distributions 161 7.2.2 Gaussian Approximation for Posterior (Laplace Type) 161 7.2.3 Posterior Point Estimators 162 7.2.4 Restricted Parameters 163 7.2.5 Noninformative Prior 163 7.3 Mean Square Error of Prediction 164 7.4 Standard Markov Chain Monte Carlo (MCMC) Methods 166 7.4.1 Motivation for Markov Chain Methods 167 7.4.2 Metropolis–Hastings Algorithm 177 7.4.3 Gibbs Sampler 178 7.4.4 Random Walk Metropolis–Hastings within Gibbs 179 7.5 Standard MCMC Guidelines for Implementation 180 7.5.1 Tuning, Burn-in, and Sampling Stages 180 7.5.2 Numerical Error 185 7.5.3 MCMC Extensions: Reducing Sample Autocorrelation 187 7.6 Advanced MCMC Methods 188 7.6.1 Auxiliary Variable MCMC Methods: Slice Sampling 189 7.6.2 Generic Univariate Auxiliary Variable Gibbs Sampler: Slice Sampler 189 7.6.3 Adaptive MCMC 192 7.6.4 Riemann–Manifold Hamiltonian Monte Carlo Sampler (Automated Local Adaption) 196 7.7 Sequential Monte Carlo (SMC) Samplers and Importance Sampling 201 7.7.1 Motivating OpRisk Applications for SMC Samplers 202 7.7.2 SMC Sampler Methodology and Components 210 7.7.3 Incorporating Partial Rejection Control into SMC Samplers 216 7.7.4 Finite Sample (Nonasymptotic) Accuracy for Particle Integration 219 7.8 Approximate Bayesian Computation (ABC) Methods 220 7.9 OpRisk Estimation and Modeling for Truncated Data 223 7.9.1 Constant Threshold - Poisson Process 224 7.9.2 Negative Binomial and Binomial Frequencies 227 7.9.3 Ignoring Data Truncation 228 7.9.4 Threshold Varying in Time 232 7.9.5 Unknown and Stochastic Truncation Level 236 8 Model Selection and Goodness-of-Fit Testing for Frequency and Severity Models 238 8.1 Qualitative Model Diagnostic Tools 238 8.2 Tail Diagnostics 240 8.3 Information Criterion for Model Selection 242 8.3.1 Akaike Information Criterion for LDA Model Selection 242 8.3.2 Deviance Information Criterion 245 8.4 Goodness-of-Fit Testing for Model Choice (How to Account for Heavy Tails!) 246 8.4.1 Convergence Results of the Empirical Process for GOF Testing 247 8.4.2 Overview of Generic GOF Tests—Omnibus Distributional Tests 256 8.4.3 Kolmogorov–Smirnov Goodness-of-Fit Test and Weighted Variants: Testing in the Presence of Heavy Tails 260 8.4.4 Cramer-von-Mises Goodness-of-Fit Tests and Weighted Variants: Testing in the Presence of Heavy Tails 271 8.5 Bayesian Model Selection 283 8.5.1 Reciprocal Importance Sampling Estimator 284 8.5.2 Chib Estimator for Model Evidence 285 8.6 SMC Sampler Estimators of Model Evidence 286 8.7 Multiple Risk Dependence Structure Model Selection: Copula Choice 287 8.7.1 Approaches to Goodness-of-Fit Testing for Dependence Structures 293 8.7.2 Double Parameteric Bootstrap for Copula GOF 297 9 Flexible Parametric Severity Models: Basics 300 9.1 Motivation for Flexible Parametric Severity Loss Models 300 9.2 Context of Flexible Heavy-Tailed Loss Models in OpRisk and Insurance LDA Models 301 9.3 Empirical Analysis Justifying Heavy-Tailed Loss Models in OpRisk 303 9.4 Quantile Function Heavy-Tailed Severity Models 305 9.4.1 g-and-h Severity Model Family in OpRisk 311 9.4.2 Tail Properties of the g-and-h, g, h, and h–h Severity in OpRisk 321 9.4.3 Parameter Estimation for the g-and-h Severity in OpRisk 324 9.4.4 Bayesian Models for the g-and-h Severity in OpRisk 328 9.5 Generalized Beta Family of Heavy-Tailed Severity Models 333 9.5.1 Generalized Beta Family Type II Severity Models in OpRisk 333 9.5.2 Sub families of the Generalized Beta Family Type II Severity Models 336 9.5.3 Mixture Representations of the Generalized Beta Family Type II Severity Models 337 9.5.4 Estimation in the Generalized Beta Family Type II Severity Models 339 9.6 Generalized Hyperbolic Families of Heavy-Tailed Severity Models 340 9.6.1 Tail Properties and Infinite Divisibility of the Generalized Hyperbolic Severity Models 342 9.6.2 Subfamilies of the Generalized Hyperbolic Severity Models 344 9.6.3 Normal Inverse Gaussian Family of Heavy-Tailed Severity Models 346 9.7 Halphen Family of Flexible Severity Models: GIG and Hyperbolic 350 9.7.1 Halphen Type A: Generalized Inverse Gaussian Family of Flexible Severity Models 355 9.7.2 Halphen Type B and IB Families of Flexible Severity Models 361 10 Dependence Concepts 365 10.1 Introduction to Concepts in Dependence for OpRisk and Insurance 365 10.2 Dependence Modeling Within and Between LDA Model Structures 366 10.2.1 Where Can One Introduce Dependence Between LDA Model Structures? 368 10.2.2 Understanding Basic Impacts of Dependence Modeling Between LDA Components in Multiple Risks 369 10.3 General Notions of Dependence 372 10.4 Dependence Measures 387 10.4.1 Linear Correlation 390 10.4.2 Rank Correlation Measures 393 10.5 Tail Dependence Parameters, Functions, and Tail Order Functions 398 10.5.1 Tail Dependence Coefficients 398 10.5.2 Tail Dependence Functions and Orders 407 10.5.3 A Link Between Orthant Extreme Dependence and Spectral Measures: Tail Dependence 410 11 Dependence Models 414 11.1 Introduction to Parametric Dependence Modeling Through a Copula 414 11.2 Copula Model Families for OpRisk 422 11.2.1 Gaussian Copula 428 11.2.2 t-Copula 430 11.2.3 Archimedean Copulas 435 11.2.4 Archimedean Copula Generators and the Laplace Transform of a Non-Negative Random Variable 439 11.2.5 Archimedean Copula Generators, l1-Norm Symmetric Distributions and the Williamson Transform 441 11.2.6 Hierarchical and Nested Archimedean Copulae 452 11.2.7 Mixtures of Archimedean Copulae 454 11.2.8 Multivariate Archimedean Copula Tail Dependence 456 11.3 Copula Parameter Estimation in Two Stages: Inference for the Margins 457 11.3.1 MPLE: Copula Parameter Estimation 458 11.3.2 Inference Functions for Margins (IFM): Copula Parameter Estimation 459 12 Examples of LDA Dependence Models 462 12.1 Multiple Risk LDA Compound Poisson Processes and Lévy Copula 462 12.2 Multiple Risk LDA: Dependence Between Frequencies via Copula 468 12.3 Multiple Risk LDA: Dependence Between the k-th Event Times/Losses 468 12.3.1 Common Shock Processes 469 12.3.2 Max-Stable and Self-Chaining Copula Models 470 12.4 Multiple Risk LDA: Dependence Between Aggregated Losses via Copula 474 12.5 Multiple Risk LDA: Structural Model with Common Factors 477 12.6 Multiple Risk LDA: Stochastic and Dependent Risk Profiles 478 12.7 Multiple Risk LDA: Dependence and Combining Different Data Sources 482 12.7.1 Bayesian Inference Using MCMC 484 12.7.2 Numerical Example 485 12.7.3 Predictive Distribution 487 12.8 A Note on Negative Diversification and Dependence Modeling 489 13 Loss Aggregation 492 13.1 Analytic Solution 492 13.1.1 Analytic Solution via Convolutions 493 13.1.2 Analytic Solution via Characteristic Functions 494 13.1.3 Moments of Compound Distribution 496 13.1.4 Value-at-Risk and Expected Shortfall 499 13.2 Monte Carlo Method 499 13.2.1 Quantile Estimate 500 13.2.2 Expected Shortfall Estimate 502 13.3 Panjer Recursion 503 13.4 Panjer Extensions 509 13.5 Fast Fourier Transform 511 13.6 Closed-Form Approximation 514 13.7 Capital Charge Under Parameter Uncertainty 519 13.7.1 Predictive Distributions 520 13.7.2 Calculation of Predictive Distributions 521 13.8 Special Advanced Topics on Loss Aggregation 523 13.8.1 Discretisation Errors and Extrapolation Methods 524 13.8.2 Classes of Discrete Distributions: Discrete Infinite Divisibility and Discrete Heavy Tails 527 13.8.3 Recursions for Convolutions (Partial Sums) with Discretised Severity Distributions (Fixed n) 535 13.8.4 Alternatives to Panjer Recursions: Recursions for Compound Distributions with Discretised Severity Distributions 543 13.8.5 Higher Order Recursions for Discretised Severity Distributions in Compound LDA Models 545 13.8.6 Recursions for Discretised Severity Distributions in Compound Mixed Poisson LDA Models 547 13.8.7 Continuous Versions of the Panjer Recursion 550 14 Scenario Analysis 556 14.1 Introduction 556 14.2 Examples of Expert Judgments 559 14.3 Pure Bayesian Approach (Estimating Prior) 561 14.4 Expert Distribution and Scenario Elicitation: Learning from Bayesian Methods 563 14.5 Building Models for Elicited Opinions: Hierarchical Dirichlet Models 566 14.6 Worst-Case Scenario Framework 568 14.7 Stress Test Scenario Analysis 571 14.8 Bow-Tie Diagram 574 14.9 Bayesian Networks 576 14.9.1 Definition and Examples 577 14.9.2 Constructing and Simulating a Bayesian Net 580 14.9.3 Combining Expert Opinion and Data in a Bayesian Net 581 14.9.4 Bayesian Net and Operational Risk 582 14.10 Discussion 584 15 Combining Different Data Sources 585 15.1 Minimum Variance Principle 586 15.2 Bayesian Method to Combine Two Data Sources 588 15.2.1 Estimating Prior: Pure Bayesian Approach 590 15.2.2 Estimating Prior: Empirical Bayesian Approach 592 15.2.3 Poisson Frequency 593 15.2.4 The LogNormal Severity 597 15.2.5 Pareto Severity 601 15.3 Estimation of the Prior Using Data 606 15.3.1 The Maximum Likelihood Estimator 606 15.3.2 Poisson Frequencies 607 15.4 Combining Expert Opinions with External and Internal Data 609 15.4.1 Conjugate Prior Extension 610 15.4.2 Modeling Frequency: Poisson Model 611 15.4.3 LogNormal Model for Severities 618 15.4.4 Pareto Model 620 15.5 Combining Data Sources Using Credibility Theory 625 15.5.1 Bühlmann–Straub Model 626 15.5.2 Modeling Frequency 628 15.5.3 Modeling Severity 631 15.5.4 Numerical Example 633 15.5.5 Remarks and Interpretation 634 15.6 Nonparametric Bayesian Approach via Dirichlet Process 635 15.7 Combining Using Dempster–Shafer Structures and p-Boxes 638 15.7.1 Dempster–Shafer Structures and p-Boxes 639 15.7.2 Dempster’s Rule 641 15.7.3 Intersection Method 643 15.7.4 Envelope Method 644 15.7.5 Bounds for the Empirical Data Distribution 645 15.8 General Remarks 647 16 Multifactor Modeling and Regression for Loss Processes 649 16.1 Generalized Linear Model Regressions and the Exponential Family 649 16.1.1 Basic Components of a Generalized Linear Model Regression in the Exponential Family 650 16.1.2 Basis Function Regression 654 16.2 Maximum Likelihood Estimation for Generalized Linear Models 655 16.2.1 Iterated Weighted Least Squares Maximum Likelihood for Generalised Linear Models 655 16.2.2 Model Selection via the Deviance in a GLM Regression 657 16.3 Bayesian Generalized Linear Model Regressions and Regularization Priors 659 16.3.1 Bayesian Model Selection for Regularlized GLM Regression 665 16.4 Bayesian Estimation and Model Selection via SMC Samplers 666 16.4.1 Proposed SMC Sampler Solution 667 16.5 Illustrations of SMC Samplers Model Estimation and Selection for Bayesian GLM Regressions 668 16.5.1 Normal Regression Model 668 16.5.2 Poisson Regression Model 669 16.6 Introduction to Quantile Regression Methods for OpRisk 672 16.6.1 Nonparametric Quantile Regression Models 674 16.6.2 Parametric Quantile Regression Models 675 16.7 Factor Modeling for Industry Data 681 16.8 Multifactor Modeling under EVT Approach 683 17 Insurance and Risk Transfer: Products and Modeling 685 17.1 Motivation for Insurance and Risk Transfer in OpRisk 685 17.2 Fundamentals of Insurance Product Structures for OpRisk 688 17.3 Single Peril Policy Products for OpRisk 692 17.4 Generic Insurance Product Structures for OpRisk 694 17.4.1 Generic Deterministic Policy Structures 694 17.4.2 Generic Stochastic Policy Structures: Accounting for Coverage Uncertainty 700 17.5 Closed-Form LDA Models with Insurance Mitigations 705 17.5.1 Insurance Mitigation Under the Poisson-Inverse-Gaussian Closed-Form LDA Models 705 17.5.2 Insurance Mitigation and Poisson-α-Stable Closed-Form LDA Models 712 17.5.3 Large Claim Number Loss Processes: Generic Closed-Form LDA Models with Insurance Mitigation 719 17.5.4 Generic Closed-Form Approximations for Insured LDA Models 734 18 Insurance and Risk Transfer: Pricing Insurance-Linked Derivatives, Reinsurance, and CAT Bonds for OpRisk 750 18.1 Insurance-Linked Securities and CAT Bonds for OpRisk 751 18.1.1 Background on Insurance-Linked Derivatives and CAT Bonds for Extreme Risk Transfer 755 18.1.2 Triggers for CAT Bonds and Their Impact on Risk Transfer 760 18.1.3 Recent Trends in CAT Bonds 763 18.1.4 Management Strategies for Utilization of Insurance-Linked Derivatives and CAT Bonds in OpRisk 763 18.2 Basics of Valuation of ILS and CAT Bonds for OpRisk 765 18.2.1 Probabilistic Pricing Frameworks: Complete and Incomplete Markets, Real-World Pricing, Benchmark Approach, and Actuarial Valuation 771 18.2.2 Risk Assessment for Reinsurance: ILS and CAT Bonds 794 18.3 Applications of Pricing ILS and CAT Bonds 796 18.3.1 Probabilistic Framework for CAT Bond Market 796 18.3.2 Framework 1: Assuming Complete Market and Arbitrage-Free Pricing 798 18.3.3 Framework 2: Assuming Incomplete Arbitrage-Free Pricing 809 18.4 Sidecars, Multiple Peril Baskets, and Umbrellas for OpRisk 815 18.4.1 Umbrella Insurance 816 18.4.2 OpRisk Loss Processes Comprised of Multiple Perils 817 18.5 Optimal Insurance Purchase Strategies for OpRisk Insurance via Multiple Optimal Stopping Times 823 18.5.1 Examples of Basic Insurance Policies 826 18.5.2 Objective Functions for Rational and Boundedly Rational Insurees 828 18.5.3 Closed-Form Multiple Optimal Stopping Rules for Multiple Insurance Purchase Decisions 830 18.5.4 Aski-Polynomial Orthogonal Series Approximations 835 A Miscellaneous Definitions and List of Distributions 842 A.1 Indicator Function 842 A.2 Gamma Function 842 A.3 Discrete Distributions 842 A.3.1 Poisson Distribution 842 A.3.2 Binomial Distribution 843 A.3.3 Negative Binomial Distribution 843 A.3.4 Doubly Stochastic Poisson Process (Cox Process) 844 A.4 Continuous Distributions 844 A.4.1 Uniform Distribution 844 A.4.2 Normal (Gaussian) Distribution 844 A.4.3 Inverse Gaussian Distribution 845 A.4.4 LogNormal Distribution 845 A.4.5 Student’s t Distribution 846 A.4.6 Gamma Distribution 846 A.4.7 Weibull Distribution 846 A.4.8 Inverse Chi-Squared Distribution 847 A.4.9 Pareto Distribution (One-Parameter) 847 A.4.10 Pareto Distribution (Two-Parameter) 847 A.4.11 Generalized Pareto Distribution 848 A.4.12 Beta Distribution 848 A.4.13 Generalized Inverse Gaussian Distribution 849 A.4.14 d-variate Normal Distribution 849 A.4.15 d-variate t-Distribution 850 Bibliography 851 Index 892

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Book SynopsisReal case studies on insurance fraud written by real fraud examiners Insurance Fraud Casebook is a one-of-a-kind collection consisting of actual cases written by fraud examiners out in the field. These cases were hand selected from hundreds of submissions and together form a comprehensive picture of the many types of insurance fraudhow they are investigated, across industries and throughout the world. Entertaining and enlightening, the cases cover every type of insurance fraud, from medical fraud to counterfeiting. Each case outlines how the fraud was engineered, how it was investigated, and how perpetrators were brought to justice Written for fraud examiners, auditors, and insurance auditors Other titles by Wells: Fraud Fighter and Corporate Fraud Handbook, Third Edition Edited by Dr. Joseph T. Wells, the founder and Chairman of the Association of Certified Fraud Examiners (ACFE), the world''s leading anti-frTable of ContentsPreface ix Insurance Fraud Classification System xiii Chapter 1 Needles in a Paystack 1Charles Piper Chapter 2 The Good Doctor and Insurance Consultant 11Michael King Chapter 3 Greasing the Wheels in the Oil Business 21Abdulrazaq Al-Morjan Chapter 4 Living the Dream, Keeping Up the Lie 31Andries J. Brummer Chapter 5 Extinguishing an Arson Fraud 39Barry Zalma Chapter 6 Weakest Link in the Chain 47Angela Bisasor Chapter 7 Everyone Gets Hurt: A Study in Workers’ Compensation Fraud 57Michael Sputo Chapter 8 The Hazards of Doing Business with Friends 67Bill Maloney Chapter 9 There’s Gold in Them Thar Malls! 75Carl Knudson Chapter 10 Damsel in Diamonds 83Michael Skrypek Chapter 11 Operation Give and Go 93Edward P. Buttimore Chapter 12 An Inspection Is Worth a Thousand Photos 103Ed Madge Chapter 13 The Danger of Trusting Too Much 113Joe Bonk Chapter 14 The Twin Cities Machine 121Bob Weir Chapter 15 With Friends Like These . . . 131John Fifarek Chapter 16 All the Buzz 139Dalene Bartholomew Chapter 17 Getting Rich from the Elderly 149John R. Holley Chapter 18 Transparent Greed 159Joseph Licandro Chapter 19 Fault of Fortune 169Jyoti Khetarpal Chapter 20 Going Blind to Fraud 179Karen Wright Chapter 21 Going Against the Cartel 191Loftin C. Woodiel Chapter 22 Falling Prey to Online Charms 199Tina Hancock Chapter 23 Big Bills in Little Cuba 209Mark Starinsky Chapter 24 Rushing an Insurance Claim 217Peter Parillo Chapter 25 Ignorance Is Bliss, While It Lasts 229Rebecca Busch Chapter 26 The Name Game 239William D. Meader Chapter 27 Woo, Wed, Insure, Murder 249William P. Hight Chapter 28 Mystery Shopping for Fraud 259Stephen Pedneault Index 269

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Book SynopsisA value management framework designed specifically for banking and insurance The Value Management Handbook is a comprehensive, practical reference written specifically for bank and insurance valuation and value management. Spelling out how the finance and risk functions add value in their respective spheres, this book presents a framework for measuring and more importantly, influencing the value of the firm from the position of the CFO and CRO. Case studies illustrating value-enhancing initiatives are designed to help Heads of Strategy offer CEOs concrete ideas toward creating more value, and discussion of hard and soft skills put CFOs and CROs in a position to better influence strategy and operations. The challenge of financial services valuation is addressed in terms of the roles of risk and capital, and business-specific value trees demonstrate the source of successful value enhancement initiatives. While most value management resources fail to adequately Table of ContentsList of Abbreviations xiii Preface xvii Acknowledgments xix About the Author xxiii Part One Introduction 1 Chapter 1 Why is Value Management Important? 3 Better Information 3 Better Insights 6 Better Decisions 8 Why Shareholder Value? 12 Chapter 2 How do CFOs and CROs Add Value? 15 The Evolution of the Corporate Center as “Shareholder Surrogate” 15 The Implications for the CFO 20 The Implications for the CRO 24 Part Two Better Information – Measuring Value 29 Chapter 3 RAPMs – The Industry Standard 31 What Makes Financial Services Unique? 31 What do RAPMs do and How? 34 The RAPM (R)evolution 37 Three RAPMs for Three Distinct Purposes 41 Linking Directly to Shareholder Value 46 Insurance Example 49 Banking Example 50 Chapter 4 Two Challenges in Using RAPMs 51 Do RAPMs Influence Strategy? 51 Do RAPMs Give the Right Signals? 55 Chapter 5 Valuing Financial Services – The Theory 71 What Determines Share Value? Market Multiples, RoE and Growth 71 But What Determines Market Multiples? 73 Why a Market-Consistent Approach? 77 Value: Where it Comes from and How to Create More of it 80 Chapter 6 Valuing Financial Services – The Evidence 85 Evidence from the Insurance Industry 85 Evidence from Banking 96 Is it Just me or are Others Thinking the Same Thing? 98 Chapter 7 Market-Consistent Valuation for Insurers 101 Introduction to Fair Valuation for Insurers 101 Calculating Traditional Embedded Value 104 European Embedded Value 106 Market Consistent Embedded Value (MCEV) 109 How is MCEV Calculated in Practice? 115 From MCEV to MVBS 120 Final Comments: Whither MCEV? 122 Part Three Better Insights – Managing Value 125 Chapter 8 Property and Casualty Insurance 127 History and Economic Rationale 127 From Principles to Rules of the Game 133 From Rules to the Valuation of PC Businesses 135 PC KPIs: Understanding and Managing Value 140 Chapter 9 Life and Health Insurance 151 History and Economic Rationale 151 From Principles to “Rules of the Game” 163 LH Valuation 167 Understanding Value Creation: Capital Intensity and Financial Risk Taking 171 Chapter 10 Banking 189 History 189 Products 195 Economic Rationale 197 From Principles to “Rules of the Game” 199 From “Rules” to Value 201 Chapter 11 Achieving Profitable Growth 211 Rules of the Game and KPIs 211 Management Actions – Three Horizons of Growth 217 Horizon 1 – Increasing Sales Productivity 218 Horizon 1 – Going Multi-channel 221 Horizon 1 – Getting More out of Existing Customers; cross sell, big data and customer loyalty 224 Horizon 1 – Managing the Customer Portfolio Skew 228 Horizon 2 – Anticipating Mega-trends 230 Horizon 2 – Exploiting Adjacencies 232 Horizon 2 – Transformational and Bolt-on Acquisitions 234 Horizon 3 – Creative Disruptions 238 Chapter 12 Achieving Operating Efficiency 241 The Importance of Operating Efficiency 242 Rules of the Game 248 Pay Less: Optimize Procurement 249 Pay Less: From Business Process Redesign to Outsourcing 250 Use Less, But More Effectively: Digitize and Automate 253 Use Less, But More Effectively: Re-engineer the Product Portfolio 254 Use Less, But More Effectively: Managing Acquisition Expenses 257 Part Four Better Decisions – Capital, Balance Sheet and Risk Management 261 Chapter 13 Corporate Strategy and Capital Allocation 263 Corporate Strategy, Capital Allocation and Performance Management 263 Capital Allocation: The Capital Budget, from Sources to Uses of Capital 265 Capital Allocation: Optimizing the Corporate Portfolio 273 Capital Allocation: Aligning Financial Resources within Constraints 278 Chapter 14 Strategic Planning and Performance Management 285 What is Strategic Planning? 285 Why does Strategic Planning Fail and What can be done About it? 295 Corporate Strategy 302 Chapter 15 Balance Sheet Management 311 Balance Sheet Management Activities 311 The Asset/Liability Committee (ALCO) Mandate and Agenda 314 The Asset/Liability Management (ALM) Unit 323 The Insurer ALM-Investment Value Chain 330 The Treasury Function 339 Chapter 16 The Economics of Asset/Liability Management 345 The Role of ALM Earnings 345 The Risks: Some Spectacular ALM Failures 349 The Returns: Are Shareholders Willing to Pay a Premium or a Discount? 361 Chapter 17 The Practical Aspects of Asset/Liability Management 371 ALM Performance and Risk Measures 372 Calculating Funds Transfer Prices (FTPs) 385 Measuring Alpha 406 Chapter 18 Cash and Liquidity Management 413 Managing Funding Liquidity Risk 413 What Happens if it Goes Wrong? 416 Measuring Funding Liquidity Risk 420 Chapter 19 Managing the Capital and Funding Structure 431 Capital Funding Management 431 Determining the Optimal Capital Structure 436 The Empirical Reality: What Determines Capital Structure? 446 Chapter 20 Risk Management 451 Enterprise Risk Management 451 Taking the Right Decisions 460 The Role of Culture 463 Chapter 21 Risk Governance and Organization 477 Risk Governance Principles 477 Role of the Board and Management 478 Three-Line-of-Defense Model 480 The Risk Function 484 Chapter 22 Risk Identification and Evaluation 491 From Risk Identification to Evaluation 491 Data-Driven Approaches 497 Evaluation-Based Approaches 499 Building a Resilient Organization 507 Chapter 23 Risk Underwriting – Strategy and Governance 513 Underwriting Context 513 Underwriting Strategy 518 Underwriting Governance 522 Chapter 24 Risk Underwriting – Technical Tools 527 Retail Segment: “Scoring” Models 527 Commercial Lines: Leveraging Expert Judgment 535 Underwriting Structured Solutions 541 Underwriting Controls, Validation and Learning 542 Chapter 25 Risk Underwriting – From Technical Pricing to Value Maximization 549 Technical Production Cost: RAPM Pricing 549 From Technical Pricing to Optimal Price 558 Chapter 26 Managing Operational and Reputational Risks 571 Defining Operational Risk 571 Managing Operational Risk 581 Chapter 27 Risk and Limit Controlling 589 Risk Reporting 589 An Effective Risk Limit Framework 601 Final Thoughts on Risk and Limit Reporting 606 Appendices Appendix A: Market Multiple Approaches 609 Appendix B: Derivation of Steady-State Valuation Multiples 613 Appendix C: Valuing Banks and Insurers: The Link Between Value and New Business and Investment RAPM 621 Appendix D: Beyond Debt and Equity 629 Glossary 641 References 653 Index 675

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Book SynopsisThe definitive and timeless guide to the principles of banking and finance, addressing and meeting the challenges of competition, strategy, regulation and the digital age.Table of ContentsForeword xvii Paul Fisher Foreword xxi Professor Alexander Lipton Foreword xxiii Rundheersing Bheenick Preface xxv Acknowledgments xxxi About the Author xxxix List of Extract Book Titles xli Part I Principles Of Banking, Finance And Financial Products 3 Chapter 1 A Primer on Banking, Finance and Financial Instruments 5 Chapter 2 Derivative Instruments and Hedging 121 Chapter 3 The Yield Curve 273 Chapter 4 Eurobonds, Securitisation and Structured Finance 345 Part II Bank Regulatory Capital and Risk Management 407 Chapter 5 Banks and Risk Management 409 Chapter 6 Banks and Credit Risk 465 Chapter 7 Understanding and Managing Operational Risk 523 Chapter 8 Regulatory Capital and the Capital Adequacy Assessment Process 541 Chapter 9 Financial Statements, Ratio Analysis, and Credit Analysis 617 Part III Bank Treasury and Strategic Asset–Liability Management 653 Chapter 10 The Bank Treasury Operating Model and ALCO Governance Process Best-Practice 655 Chapter 11 Bank Asset–Liability Management (ALM) and “Strategic ALM” 697 Chapter 12 Liquidity and Funding: Policy, Management, and Risk Management 795 Chapter 13 Market Risk and Non-Traded Market Risk (Interest-Rate Risk in the Banking Book) 971 Chapter 14 The Future of Bank Treasury and Balance Sheet Risk Management 1033 Chapter 15 Regulatory Reporting and Principles of Policy Documentation 1055 Part IV The Future of Banking: Strategy, Governance and Culture 1087 Chapter 16 Strategy Setting: Principles for Sustained Bank Viability 1091 Chapter 17 Present and Future Principles of Governance and Culture 1147 Chapter 18 Present and Future Principles of Banking: Business Model and Customer Service 1187 Part V Case Studies: Analysis, Coherent Advice and Problem Solving 1211 Chapter 19 Case Studies: Analysis, Coherent Advice and Problem Solving 1213 Chapter 20 Guide to the Website 1245 Afterword 1251 Index 1253

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Book SynopsisThe business guide to Big Data in insurance, with practical application insight Big Data and Analytics for Insurers is the industry-specific guide to creating operational effectiveness, managing risk, improving financials, and retaining customers. Written from a non-IT perspective, this book focusses less on the architecture and technical details, instead providing practical guidance on translating analytics into target delivery. The discussion examines implementation, interpretation, and application to show you what Big Data can do for your business, with insights and examples targeted specifically to the insurance industry. From fraud analytics in claims management, to customer analytics, to risk analytics in Solvency 2, comprehensive coverage presented in accessible language makes this guide an invaluable resource for any insurance professional. The insurance industry is heavily dependent on data, and the advent of Big Data and analytics represents a major advancTrade Review"..essential reading for insurance management of all levels and specialities, for students, and for IT suppliers to the insurance industry." (Only Strategic, December 2016)Table of ContentsPreface xi Acknowledgements xiii About the Author xv CHAPTER 1 Introduction – The New ‘Real Business’ 1 1.1 On the Point of Transformation 2 1.1.1 Big Data Defined by Its Characteristics 3 1.1.2 The Hierarchy of Analytics, and how Value is Obtained from Data 6 1.1.3 Next Generation Analytics 7 1.1.4 Between the Data and the Analytics 9 1.2 Big Data and Analytics for All Insurers 10 1.2.1 Three Key Imperatives 10 1.2.2 The Role of Intermediaries 13 1.2.3 Geographical Perspectives 14 1.2.4 Analytics and the Internet of Things 15 1.2.5 Scale Benefit – or Size Disadvantage? 15 1.3 How Do Analytics Actually Work? 17 1.3.1 Business Intelligence 18 1.3.2 Predictive Analytics 20 1.3.3 Prescriptive Analytics 22 1.3.4 Cognitive Computing 23 Notes 24 CHAPTER 2 Analytics and the Office of Finance 25 2.1 The Challenges of Finance 26 2.2 Performance Management and Integrated Decision-making 27 2.3 Finance and Insurance 27 2.4 Reporting and Regulatory Disclosure 29 2.5 GAAP and IFRS 29 2.6 Mergers, Acquisitions, and Divestments 30 2.7 Transparency, Misrepresentation, The Securities Act and ‘SOX’ 31 2.8 Social Media and Financial Analytics 32 2.9 Sales Management and Distribution Channels 33 2.9.1 Agents and Producers 34 2.9.2 Distribution Management 35 Notes 36 CHAPTER 3 Managing Financial Risk across the Insurance Enterprise 37 3.1 Solvency II 37 3.2 Solvency II, Cloud Computing and Shared Services 40 3.3 ‘Sweating the Assets’ 40 3.4 Solvency II and IFRS 41 3.5 The Changing Role of the CRO 42 3.6 CRO as the Customer Advocate 45 3.7 Analytics and the Challenge of Unpredictability 45 3.8 The Importance of Reinsurance 46 3.9 Risk Adjusted Decision-Making 46 Notes 49 CHAPTER 4 Underwriting 51 4.1 Underwriting and Big Data 52 4.2 Underwriting for Specialist Lines 54 4.3 Telematics and User-Based Insurance as an Underwriting Tool 55 4.4 Underwriting for Fraud Avoidance 56 4.5 Analytics and Building Information Management (BIM) 57 Notes 58 CHAPTER 5 Claims and the ‘Moment of Truth’ 61 5.1 ‘Indemnity’ and the Contractual Entitlement 61 5.2 Claims Fraud 62 5.2.1 Opportunistic Fraud 63 5.2.2 Organized Fraud 64 5.3 Property Repairs and Supply Chain Management 66 5.4 Auto Repairs 71 5.5 Transforming the Handling of Complex Domestic Claims 73 5.5.1 The Digital Investigator 73 5.5.2 Potential Changes in the Claims Process 75 5.5.3 Reinvention of the Supplier Ecosystem 76 5.6 Levels of Inspection 77 5.6.1 Reserving 78 5.6.2 Business Interruption 79 5.6.3 Subrogation 80 5.7 Motor Assessing and Loss Adjusting 81 5.7.1 Motor Assessing 82 5.7.2 Loss Adjusting 83 5.7.3 Property Claims Networks 84 5.7.4 Adjustment of Cybersecurity Claims 87 5.7.5 The Demographic Time Bomb in Adjusting 87 Notes 88 CHAPTER 6 Analytics and Marketing 91 6.1 Customer Acquisition and Retention 93 6.2 Social Media Analytics 96 6.3 Demography and How Population Matters 97 6.4 Segmentation 98 6.5 Promotion Strategy 100 6.6 Branding and Pricing 100 6.7 Pricing Optimization 101 6.8 The Impact of Service Delivery on Marketing Success 102 6.9 Agile Development of New Products 103 6.10 The Challenge of ‘Agility’ 104 6.11 Agile vs Greater Risk? 105 6.12 The Digital Customer, Multi- and Omni-Channel 105 6.13 The Importance of the Claims Service in Marketing 106 Notes 107 CHAPTER 7 Property Insurance 109 7.1 Flood 109 7.1.1 Predicting the Cost and Likelihood of Flood Damage 110 7.1.2 Analytics and the Drying Process 111 7.2 Fire 112 7.2.1 Predicting Fraud in Fire Claims 113 7.3 Subsidence 115 7.3.1 Prediction of Subsidence 116 7.4 Hail 119 7.4.1 Prediction of Hail Storms 120 7.5 Hurricane 121 7.5.1 Prediction of Hurricane Damage 121 7.6 Terrorism 122 7.6.1 Predicting Terrorism Damage 123 7.7 Claims Process and the ‘Digital Customer’ 124 Notes 125 CHAPTER 8 Liability Insurance and Analytics 127 8.1 Employers’ Liability and Workers Compensation 127 8.1.1 Fraud in Workers Compensation Claims 128 8.1.2 Employers’ Liability Cover 130 8.1.3 Effective Triaging of EL Claims 130 8.2 Public Liability 131 8.3 Product Liability 132 8.4 Directors and Officers Liability 133 Notes 134 CHAPTER 9 Life and Pensions 135 9.1 How Life Insurance Differs from General Insurance 136 9.2 Basis of Life Insurance 137 9.3 Issues of Mortality 138 9.4 The Role of Big Data in Mortality Rates 139 9.5 Purchasing Life Insurance in a Volatile Economy 140 9.6 How Life Insurers Can Engage with the Young 141 9.7 Life and Pensions for the Older Demographic 142 9.8 Life and Pension Benefits in the Digital Era 143 9.9 Life Insurance and Bancassurers 145 Notes 147 CHAPTER 10 The Importance of Location 149 10.1 Location Analytics 149 10.1.1 The New Role of the Geo-Location Expert 149 10.1.2 Sharing Location Information 150 10.1.3 Geocoding 150 10.1.4 Location Analytics in Fraud Investigation 151 10.1.5 Location Analytics in Terrorism Risk 152 10.1.6 Location Analytics and Flooding 152 10.1.7 Location Analytics, Cargo and Theft 154 10.2 Telematics and User-Based Insurance (‘UBI’) 155 10.2.1 History of Telematics 155 10.2.2 Telematics in Fraud Detection 157 10.2.3 What is the Impact on Motor Insurers? 157 10.2.4 Telematics and Vehicle Dashboard Design 158 10.2.5 Telematics and Regulation 159 10.2.6 Telematics – More than Technology 160 10.2.7 User-Based Insurance in Other Areas 161 10.2.8 Telematics in Commercial Insurances 162 Notes 164 CHAPTER 11 Analytics and Insurance People 167 11.1 Talent Management 167 11.1.1 The Need for New Competences 168 11.1.2 Essential Qualities and Capabilities 169 11.2 Talent, Employment and the Future of Insurance 173 11.2.1 Talent Analytics and the Challenge for Human Resources 173 11.3 Learning and Knowledge Transfer 174 11.3.1 Reading Materials 175 11.3.2 Formal Qualifications and Structured Learning 175 11.3.3 Face-to-Face Training 176 11.3.4 Social Media and Technology 177 11.4 Leadership and Insurance Analytics 178 11.4.1 Knowledge and Power 179 11.4.2 Leadership and Influence 179 11.4.3 Analytics and the Impact on Employees 181 11.4.4 Understanding Employee Resistance 182 Notes 184 CHAPTER 12 Implementation 185 12.1 Culture and Organization 188 12.1.1 Communication and Evangelism 192 12.1.2 Stakeholders’ Vision of the Future 193 12.2 Creating a Strategy 193 12.2.1 Program Sponsorship 194 12.2.2 Building a Project Program 195 12.2.3 Stakeholder Management 197 12.2.4 Recognizing Analytics as a Tool of Empowerment 198 12.2.5 Creation of Open and Trusting Relationships 199 12.2.6 Developing a Roadmap 200 12.2.7 Implementation Flowcharts 202 12.3 Managing the Data 202 12.3.1 Master Data Management 203 12.3.2 Data Governance 203 12.3.3 Data Quality 204 12.3.4 Data Standardization 204 12.3.5 Storing and Managing Data 205 12.3.6 Security 207 12.4 Tooling and Skillsets 207 12.4.1 Certification and Qualifications 208 12.4.2 Competences 208 Notes 209 CHAPTER 13 Visions of the Future? 211 13.1 Auto 2025 211 13.2 The Digital Home in 2025 – ‘Property Telematics’ 214 13.3 Commercial Insurance – Analytically Transformed 218 13.4 Specialist Risks and Deeper Insight 220 13.5 2025: Transformation of the Life and Pensions Industry 221 13.6 Outsourcing and the Move Away from Non-Core Activities 223 13.7 The Rise of the Super Supplier 224 Notes 225 CHAPTER 14 Conclusions and Reflections 227 14.1 The Breadth of the Challenge 229 14.2 Final Thoughts 230 Notes 231 APPENDIX A Recommended Reading 233 APPENDIX B Data Summary of Expectancy of Reaching 100 235 APPENDIX C Implementation Flowcharts 239 APPENDIX D Suggested Insurance Websites 265 APPENDIX E Professional Insurance Organizations 267 Index 269

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Book SynopsisLearn from some of the most respected women in insurance and risk management Women to Watch presents the advice, guidance, and lessons learned from the most successful women in risk management and insurance.Table of ContentsForeword ix Joanne Wojcik Acknowledgments xiii Chapter 1 I’m Strong 1 Ingrid Lindberg Chapter 2 My College-Self Says, “What Glass Ceiling?”. My Now-Self Responds 15 Lindsey Frase Chapter 3 Building Your Personal Brand 25 Kimberly George Chapter 4 Hear Me Roar 35 Caryn Siebert Chapter 5 Lessons Learned in a 30-Year Career 49 Carol Arendall Chapter 6 The Myth of Work-Life Balance 57 Carolina Klint Chapter 7 Dirty Glass Ceilings 65 Yvette Connor Chapter 8 Integration: The Key to Happiness 79 Janet Pane Chapter 9 Women on Boards 89 Terrie Pohjola Chapter 10 A Growth Story 103 Carol L. Murphy Chapter 11 What If 117 Linda Lane Chapter 12 Game Changers 129 Artemis Emslie Appendix Women to Watch (by year) 139 About the Authors 151 Index 163

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Book SynopsisGain a holistic view of agricultural (re)insurance and capital market risk transfer Increasing agricultural production and food security remain key challenges for mankind. In order to meet global food demand, the Food and Agriculture Organisation estimates that production has to increase by 50% by 2050 and requires large investments. Agricultural insurance and financial instruments have been an integral part to advancing productivity and are becoming more important in increasingly globalized and specialized agricultural supply chains in the wake of potentially more frequent and severe natural disasters in today's key producing markets. Underwriting, pricing and transferring agricultural risks is complex and requires a solid understanding of the production system, exposure, perils and the most suitable products, which vastly differ among developed and developing markets. In the last decade, new insurance schemes in emerging agricultural markets have greatly contrTable of ContentsForeword ix Introduction xi Acknowledgements xiii Special Thanks xv CHAPTER 1 Agricultural Markets and Risk Management 1 CHAPTER 2 Concepts of Insurance 21 CHAPTER 3 Agricultural Perils and Risk Modelling Concepts 45 CHAPTER 4 Agricultural Data and Proxies 103 CHAPTER 5 Agricultural Insurance 149 CHAPTER 6 Crop Insurance 189 CHAPTER 7 Livestock Insurance 271 CHAPTER 8 Aquaculture Insurance 311 CHAPTER 9 Forest Insurance 333 CHAPTER 10 Risk Transfer to Reinsurance Markets 363 CHAPTER 11 Risk Transfer to Capital Markets 393 ACRONYMS AND ABBREVIATIONS 407 INDEX 409

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Book SynopsisReduce or prevent risk failure losses with new and emerging technologies Rogues of Wall Street analyzes the recent risk failures and errors that have overwhelmed Wall Street for the past decade. Written by a veteran risk, compliance, and governance specialist, this book helps bank leaders and consultants identify the tools they need to effectively manage operational risk. Citing different types of risk events such as: Rogue and Insider Trading, cyber security, AML, the Mortgage Crisis, and other major events, chapters in the first half of the book detail each operational risk type along with its causative and contributing factors. The second half of the book takes an overarching approach to the tools and solutions available to financial institutions to manage such events in the future. From technology, to culture, to governance, and more, this book does more than simply identify the problemit provides real-world solutions with actionable insight. Expert discussiTable of ContentsIntroduction: A Risky Business ix Acknowledgments xvii About the Author xix 1 The Historical Context 1 2 The Rogue Trader 7 3 Genius Traders: Who They Are and How to Catch Them 19 4 Insider Trading 27 5 Price Manipulation Risk: The Big Unknown 37 6 The Mortgage Mess 45 7 Ponzi Schemes and Snake Oil Salesmen 53 8 Rogue Computer 63 9 Funding the Bad Guys—Winning the AML Battle 73 10 Litigation and Big Data Risk 85 11 Twitter Risk and Fake News Risk 91 12 Spreadsheet Risk: Should We Ban Excel? 95 13 Acts of God Risk 99 14 Cybersecurity— The Threat from Outside and Inside the Firewall 101 15 Turning the Tables on Risk 107 16 Building the Right Culture: Values, Organization, and Culture 113 17 The 360-Degree Risk Management Function 123 18 What We Talk about When We Talk about Risk 137 19 The Future Is Unknowable, the Present Burdensome; Only the Past Can Be Understood 147 20 The New Tools of the Trade 159 21 Cognitive Technologies 169 22 The Role of Government and Regulators in Managing Risk 177 23 Case Studies and Guiding Principles in Planning for Disaster 185 24 The Risk Management Society and Its Friends 191 25 Conclusion: Seven Traits for Successfully Managing Cognitive Risk 203 Index 207

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Book SynopsisThe non-technical handbook for cyber security risk management Solving Cyber Risk distills a decade of research into a practical framework for cyber security. Blending statistical data and cost information with research into the culture, psychology, and business models of the hacker community, this book providesbusiness executives, policy-makers, and individualswith a deeper understanding of existing future threats, and an action plan for safeguarding their organizations. Key Risk Indicators reveal vulnerabilities based on organization type, IT infrastructure and existing security measures, while expert discussion from leading cyber risk specialists details practical, real-world methods of risk reduction and mitigation. By the nature of the business, your organization's customer database is packed with highly sensitive information that is essentially hacker-bait, and even a minor flaw in security protocol could spell disaster. This book takes you deep into the cyber threat landscape tTable of ContentsAbout the Authors ix Acknowledgments xi CHAPTER 1 Counting the Costs of Cyber Attacks 1 1.1 Anatomy of a Data Exfiltration Attack 1 1.2 A Modern Scourge 7 1.3 Cyber Catastrophes 12 1.4 Societal Cyber Threats 19 1.5 Cyber Risk 21 1.6 How Much Does Cyber Risk Cost Our Society? 24 Endnotes 30 CHAPTER 2 Preparing for Cyber Attacks 33 2.1 Cyber Loss Processes 33 2.2 Data Exfiltration 34 2.3 Contagious Malware Infection 41 2.4 Denial of Service Attacks 56 2.5 Financial Theft 63 2.6 Failures of Counterparties or Suppliers 68 Endnotes 78 CHAPTER 3 Cyber Enters the Physical World 81 3.1 A Brief History of Cyber-physical Interactions 81 3.2 Hacking Attacks on Cyber-physical Systems 83 3.3 Components of Cyber-physical Systems 86 3.4 How to Subvert Cyber-physical Systems 88 3.5 How to Cause Damage Remotely 91 3.6 Using Compromises to Take Control 92 3.7 Operating Compromised Systems 93 3.8 Expect the Unexpected 95 3.9 Smart Devices and the Internet of Things 99 Endnotes 101 CHAPTER 4 Ghosts in the Code 103 4.1 All Software Has Errors 103 4.2 Vulnerabilities, Exploits, and Zero Days 104 4.3 Counting Vulnerabilities 108 4.4 Vulnerability Management 113 4.5 International Cyber Response and Defense 118 Endnotes 122 CHAPTER 5 Know Your Enemy 125 5.1 Hackers 125 5.2 Taxonomy of Threat Actors 127 5.3 The Insider Threat 143 5.4 Threat Actors and Cyber Risk 145 5.5 Hackonomics 147 Endnotes 151 CHAPTER 6 Measuring the Cyber Threat 153 6.1 Measurement and Management 153 6.2 Cyber Threat Metrics 158 6.3 Measuring the Threat for an Organization 162 6.4 The Likelihood of Major Cyber Attacks 170 Endnotes 182 CHAPTER 7 Rules, Regulations, and Law Enforcement 183 7.1 Cyber Laws 183 7.2 US Cyber Laws 186 7.3 EU General Data Protection Regulation (GDPR) 190 7.4 Regulation of Cyber Insurance 192 7.5 A Changing Legal Landscape 194 7.6 Compliance and Law Enforcement 196 7.7 Law Enforcement and Cyber Crime 199 Endnotes 205 CHAPTER 8 The Cyber-Resilient Organization 207 8.1 Changing Approaches to Risk Management 207 8.2 Incident Response and Crisis Management 208 8.3 Resilience Engineering 212 8.4 Attributes of a Cyber-resilient Organization 214 8.5 Incident Response Planning 218 8.6 Resilient Security Solutions 219 8.7 Financial Resilience 225 Endnotes 234 CHAPTER 9 Cyber Insurance 235 9.1 Buying Cyber Insurance 235 9.2 The Cyber Insurance Market 244 9.3 Cyber Catastrophe Risk 248 9.4 Managing Portfolios of Cyber Insurance 251 9.5 Cyber Insurance Underwriting 258 9.6 Cyber Insurance and Risk Management 263 Endnotes 264 CHAPTER 10 Security Economics and Strategies 267 10.1 Cost-Effectiveness of Security Enhancements 267 10.2 Cyber Security Budgets 271 10.3 Security Strategies for Society 276 10.4 Strategies of Cyber Attack 283 10.5 Strategies of National Cyber Defense 289 Endnotes 294 CHAPTER 11 Ten Cyber Problems 295 11.1 Setting Problems 295 1 The Canal Safety Decision Problem 298 2 The Software Dependency Problem 300 3 The Vulnerability Inheritance Problem 301 4 The Vulnerability Count Problem 302 5 The Malware Overlap Problem 303 6 The Vulnerability Lifespan Problem 304 7 The Binary Similarity Problem 304 8 The Virus Modification Problem 306 9 The Cyber Criminal’s Dilemma Problem 306 10 The Security Verification Problem 307 Endnotes 308 CHAPTER 12 Cyber Future 309 12.1 Cybergeddon 309 12.2 Cybertopia 315 12.3 Future Technology Trends 321 12.4 Getting the Cyber Risk Future We Want 328 Endnotes 331 References 333 Index 355

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Book SynopsisDiscover what demographics can tell us about the economy, markets, and the future In Demographics Unravelled, renowned Macro-Demographics expert Amlan Roy delivers an insightful and timely exploration of the impact that people characteristics have on national economies. Considering factors like gender, race, migrant status, family background, and education, the author delves deeply into a subject that drives market behavior and economic variables, including growth, debt, inflation, employment, and productivity. These have national and international policy implications. In this one-of-a-kind book, you'll discover: Why the study of demographics is the hidden key to understanding economic growth, asset prices, and capital flowsHow to use detailed demographics to forecast future scenarios in economics, socioeconomics, geopolitics, and the environmentThe short-, medium-, and long-term effects of consumer and worker behaviorHow understanding demographics is key to understanding health, pensions, migration, sustainability and social policies. It is intimately linked to the Sustainable Development Goals of the UNGender, Climate, Poverty and Inequality Perfect for institutional investors, insurance professionals, economists, and business leaders, Demographics Unravelled will also earn a place in the libraries of academics and students studying a variety of economic disciplines and seeking a one-stop and in-depth discussion of demographics-drivenmacroeconomic effects.Table of ContentsAcknowledgements xv Selected Abbreviations xvii Preface xix Chapter 1: Introduction 1 1.1 Recasting Demographics 2 1.2 Effects and Implications of Demographics 5 Chapter 2: Core Data: Past, Present, and Future 11 2.1 Economic History and the History of Global Population Trends 13 2.2 Core Demographic Variables: Data, Analysis, and Some Observations 16 2.2.1 Population Size and Population Growth 16 2.2.2 Ageing Populations 18 2.2.3 Life Expectancy Increases 20 2.2.4 Total Fertility Rates 21 2.2.5 Dependency Ratios 23 2.2.6 Gender Ratios 26 2.2.7 Age Structure and Population Pyramids 29 2.2.8 The Demographic Transition Model 32 2.3 The Role of Migration 35 2.4 Urbanisation 46 2.5 Small Nation- States: Demographics 50 2.6 Changing Longevity— Metrics Need Changing 51 2.7 Changing Social and Individual Behaviour 53 2.8 Multiple Generations 55 2.9 Conclusion 57 Chapter 3: Demographics and Macroeconomics 59 3.1 Demographics and Economic Growth 60 3.2 The “Demographic Dividend” and GDP per Capita Growth 66 3.3 Inflation 70 3.4 Debt, Deficits, and Fiscal Sustainability 84 3.5 Demographics, Monetary Policy, and Interest Rates 90 3.6 Demographics and Unemployment 93 3.7 Demographics, Capital Flows, and Current Account 95 3.8 Conclusions 96 Chapter 4: Demographics and Asset Prices 99 4.1 Theories of Life- Cycle Consumption, Savings, and the Permanent Income Hypothesis 100 4.1.1 Life- Cycle Consumption Theory 100 4.1.2 Permanent Income Hypothesis 102 4.1.3 Consumption, Savings, and Intertemporal Loans: Pioneer Paul Samuelson 104 4.2 How Demographics Influences Equity Prices and Markets 105 4.3 Will There Be an Asset Market Meltdown When the Baby Boomers Retire? 116 4.4 Demographic Changes and Interest Rates (Bond Yields) 119 4.5 Demographics and Risk Premiums 124 4.6 Asset Holdings and Age 125 4.7 Demographics and Equity Sectors 128 4.8 Demographics and Real Estate 136 4.9 Demographics and Commodities 140 4.10 Conclusions 143 Chapter 5: Health and Longevity 147 5.1 Health Issues, Expenditures, and Measures 149 5.1.1 Health Expenditures 150 5.1.2 Global Health Security 152 5.1.3 Global Burden of Disease 155 5.1.4 Health in Emerging Countries 157 5.2 Longevity 163 5.2.1 Increases in Life Expectancy and Conditional Life Expectancy 164 5.2.2 Life Expectancy vs. Healthy Life Expectancy 166 5.2.3 DALYs and Their Causes 168 5.2.4 Longevity and Mortality: More Than Just Births and Deaths 169 5.2.5 Longevity Risk and the Uncertain Future of Longevity 172 5.2.6 Longevity Forecasting Models: Countries and Regions 174 5.2.7 Short Summary of Longevity Models 177 5.2.8 Annuities as a Longevity Risk Management Tool 183 5.2.9 Other Longevity Risk Management Tools and Instruments 187 5.3 Conclusions 190 Chapter 6: Pensions and Retirement 193 6.1 A Brief History of Social Security and Pensions 194 6.1.1 Pre–Social Security 195 6.1.2 Committee on Economic Security 196 6.2 Evaluating Pension Systems: Indicators and Cross- Country Comparisons 200 6.3 Evaluating Age- Related Pension Expenditures Across Countries 208 6.4 Pensions and Pension Systems: The Experts 210 6.5 Pensions, Asset Allocation, Investments, and Capital Markets 224 6.6 Pensions and Corporate Finance/Equity Prices 230 6.7 The Future of Retirement and Conclusions 231 Chapter 7: Quality of Life, Gender, Governance and Sustainability 235 7.1 Utility Theory, Social Welfare, and Happiness 236 7.2 Quality of Life: Human Development Index (HDI) 243 7.3 Gender and Governance 245 7.4 Corruption and Transparency 249 7.5 Sustainability and Climate Change 252 7.6 Politics and Geopolitics 254 7.7 Conclusion 256 Chapter 8: Summary and Conclusions 257 Notes 263 Index 283

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Book SynopsisArtificial Intelligence for Risk Mitigation in the Financial Industry This book extensively explores the implementation of AI in the risk mitigation process and provides information for auditing, banking, and financial sectors on how to reduce risk and enhance effective reliability. The applications of the financial industry incorporate vast volumes of structured and unstructured data to gain insight into the financial and non-financial performance of companies. As a result of exponentially increasing data, auditors and management professionals need to enhance processing capabilities while maintaining the effectiveness and reliability of the risk mitigation process. The risk mitigation and audit procedures are processes involving the progression of activities to transform inputs into output. As AI systems continue to grow mainstream, it is difficult to imagine an aspect of risk mitigation in the financial industry that will not require AI-related assurance or AI-assisted advisory serv

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Book SynopsisJanthana Kaenprakhamroy, based in London, UK, is founder of multiple award-winning insurtech Tapoly, the first on-demand insurance platform for the gig economy in Europe. Recognized as a trailblazer working at the intersection of insurance and technology, she was named one of Forbes' Top 100 Women Founders to Watch (no.6), one of the Insurtech Institute's Top Ten InsurTech Influencers, one of the Most Influential Women in Tech, the winner of Elite Women in 2021 and an Insurance Leader of the Year.

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Book SynopsisWritten for advanced undergraduate and master's level courses, this book builds from a base of asymmetric information issues to discuss a wide array of topics and is illustrated with some timely examples.Table of Contents0. Introduction. Part I: Fundamentals of Insurance. 1. Risk and Expected Utility. 2. Risk Aversion and Riskiness. 3. Principles of Insurance: Risk Sharing and Transfer. Part II: Demand for Insurance and Insurance Contract. 4. Risk Aversion and Insurance. 5. Corporate Insurance and Risk Management. 6. Liability and Insurance. Part III: Information and Insurance Contract. 7. Basic Adverse Selection Models. 8. Advanced Topics in Adverse Selection. 9. Moral Hazard. 10. Ex Post Moral Hazard and Fraud. Part IV: Insurance Market. 11. Insurer Organization. 12. Competition in the Insurance Market. 13. Insurance Cycle and Capacity. Part V: Insurer Management. 14. Insurance Distribution Systems. 15. Insurance Pricing.

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Book SynopsisAn insightful overview of health insurers and a guide to sustainability for provider organizations. Physicians experience ongoing frustrations in their relationships with health plans. Even as they struggle to keep up with accelerating clinical advances, they face daunting challenges from payers that are transitioning from traditional fee-for-service contracts to complex alternative payment models. In Health Plans Unmasked, Martin Lustick, MD, offers insights and guidance for those who face the herculean task of transforming their business practices to achieve financial stability while improving outcomes for their patients. By explaining both how and why insurance companies behave the way they do, Dr. Lustick helps providers avoid mistakes and take advantage of opportunities for success. He provides information on: The evolution of health care financing in the United States The nuts and bolts of health plan capabilities and the real motives of health plan administrators Tips for suTable of ContentsForewordAcknowledgmentsSection 1: The Basics1. Historical Context2. What is a Health Plan?3. Medicare4. Medicaid5. Commercial Insurance6. Brokers and ConsultantsSection 2: Reimbursement Basics7. The ABCs of Fee for Service8. What Happens to a Claim?9. Payment Errors10. Health Plan Strategic Concerns11. Analytics12. Cost Management Strategies13. Quality14. Care Management15. Health Plan CommitteesSection 3: Contracting16. Health Plan Contracting 10117. Value-Based Budgeting18. Incentive Payments19. Risk MitigationSection 4: Opportunities and Obstacles in Value-Based Care20. Price Transparency21. Subrogation22. Pharmacy Benefit Management23. On Becoming a PayviderSection 5: A Shifting Paradigm24. Closing ThoughtsGlossary of AcronymsIndex

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Book SynopsisInsurance is an important – if still poorly understood – mechanism for dealing with a broad variety of risks associated with modern life. This book conducts an in-depth examination of one of the largest and longest-established private insurance industries in Europe: British life insurance. In doing so, it draws on over 40 oral history interviews to trace how the sector has changed since the 1970s, a period characterized by rampant financialization and neoliberalization. Combining insights from science and technology studies and economic sociology, this is an unprecedented study of the evolution of insurance practices and an invaluable contribution to our understanding of financial capitalism.Table of ContentsChapter 1: Life Insurance in the Age of Finance Chapter 2: Financialization, Quantification and Evaluation Chapter 3: Shifting Boundaries between Insurance and Finance Chapter 4: Actuaries Going on a Random Walk Chapter 5: ‘Authors of Their Own Misfortune’ Chapter 6: ‘Taking Account of What the Market Has To Say’ Chapter 7: Managing Risk in Insurance Chapter 8: The Long Road to Solvency II (and Back Again?) Chapter 9: De-Risking Pensions, Managing Assets Chapter 10: Financial Evaluation and the Future of Insurance Society References

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Book SynopsisInsurance and risk management make up an immense, complex global industry, one which is constantly changing. Competition continues to heat up as mergers and acquisitions create international mega-firms. As the insurance industry grows more global, underwriters see huge potential in China, the world's fastest-growing business market, as well as India, Indonesia, Africa and other emerging markets. Specialty insurance is creating high profits. Meanwhile, technology is making back-office tasks easier and more efficient, while direct selling and e-commerce are changing the shape of the insurance industry. This carefully researched book is a complete insurance market research and business intelligence tool - everything you need to know about the business of insurance and risk management. The book includes our analysis of insurance and risk management industry trends; dozens of statistical tables; an industry glossary; a database of industry associations and professional organizations; and our in-depth profiles of more than 300 of the world's leading insurance companies, both in the U.S. and abroad. You'll find a complete overview, industry analysis and market research report in one superb, value-priced package.Table of Contents Introduction 1 How to Use This Book 3 Chapter 1: Major Trends Affecting the Insurance Industry 7 1) Introduction to the Insurance Industry 8 2) Sophisticated Risk Management and Prevention Programs Lead to Lower Losses 9 3) Risk Managers Seek Certification 10 4) Independent Agencies Continue to Dominate Commercial Insurance, but Play a Lesser Role in Personal Lines 10 5) Insurance Direct Selling and E-Commerce Grow 10 6) Insurance Underwriting Uses Artificial Intelligence (AI)/Policy Holders Allow Their Habits to Be Tracked for Lower Insurance Rates 12 7) Artificial Intelligence (AI) Enables Life Insurance Underwriting 14 8) States Pick Up Some Wind and Flood Risk for Homeowners/Underwriters Rely on Sophisticated Risk Analysis Technology to Set Rates 14 9) No End in Sight to the Growth of Specialized Insurance Lines 15 10) Health Sharing Ministries Attract Millions of Members 16 11) Annuity Account Managers Create New Product Strategies 16 12) Major U.S., Japanese and European Insurance Firms See Vast Promise in Chinese, Southeast Asian and Emerging Markets 16 13) Continued Rise in Health Care Costs 18 14) Number of Uninsured Americans Declines But Remains High 19 15) U.S. Affordable Care Act (ACA) of 2010 Rewrote the Rules and Increased Coverage, But Costs Continue to Rise 19 16) Employers Fight Rapidly Growing Health Care Premiums/Require Employees to Pay a Significant Share of Costs 19 17) Insurance Companies Change Strategies Due to Affordable Care Act (ACA) and Rapidly Rising Costs of Care 21 18) Malpractice Suits Are Blamed for Rising Health Care Costs/Tort Reform Is Capping Awards for Damages 21 19) Hedge Funds and Private Equity Play a Major Role in Financial Products Including Derivatives, Lending and Insurance 22 20) Aging Populations, Baby Boomers Create Opportunities/U.S. Pension Accounts Top $36.7 Trillion 23 21) Basel III, Dodd-Frank Act and Volcker Act Increase Regulation/European Solvency II and MiFID 2 Take Effect 24 22) Financial Technology (FinTech) Enables Online Lending, Insurance and Robo Advisors 25 23) Drones Save Time and Money in a Variety of Industries Including Insurance, Real Estate and Construction 27 24) Gig Economy and Self-Driving Cars Pose Insurance Challenges and Underwriting Opportunities 27 25) The Future of the Insurance Industry and Risk Management 28 Chapter 2: Insurance Industry Statistics 29 Insurance Industry Statistics and Market Size Overview 30 Assets & Liabilities of U.S. Property-Casualty Insurance Companies: 2020-2nd Quarter 2023 31 Assets & Liabilities of U.S. Life Insurance Companies: 2020-2nd Quarter 2023 32 Employers' Costs for Total Compensation and Health Insurance, by Selected Characteristics, U.S.: Selected Years, 2019-2023 33 The Nation's Health Dollar: 2023 Where It Came From (Projected) 34 The Nation's Health Dollar: 2023 Where It Went (Estimated) 35 Number & Percent of Persons of All Ages with and without Health Insurance Coverage, U.S.: 2007-2022 36 Number & Percent of Persons without Health Insurance Coverage, by Age Group, U.S.: 2000-2022 37 Medical Care Benefits in the U.S.: Access, Participation and Take-Up Rates, March 2023 38 Retirement Benefits in the U.S.: Access, Participation and Take-Up Rates, March 2023 39 Employment in the Insurance Industry, U.S.: 2017-July 2023 40 Chapter 3: Important Insurance Industry Contacts 41 (Addresses, Phone Numbers and Internet Sites) Chapter 4: THE INSURANCE 350: Who They Are and How They Were Chosen 61 Index of Companies Within Industry Groups 62 Alphabetical Index 71 Index of U.S. Headquarters Location by State 75 Index of Non-U.S. Headquarters Location by Country 78 Individual Data Profiles on Each of THE INSURANCE 350 81 Additional Indexes Index of Hot Spots for Advancement for Women/Minorities 444 Index by Subsidiaries, Brand Names and Selected Affiliations 446 A Short Insurance Industry Glossary 465

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Book SynopsisThis book is an important contribution to a question that has received little analysis hitherto, namely, what is and what are the effect(s) of the duties imposed on an insurer to provide information to prospective policyholders. As well as original analysis of English, German and prospective European law, and with insights from law and economics, it makes some key recommendations. It should be read by all academics, policymakers, professionals and regulators with an interest in insurance law.'- John Birds, University of Manchester, UK'The serious reader will find here a first class monograph, well-structured and scholarly, with a clear perspective on some important issues arising in the law of insurance contracts today.'- From the foreword by Malcolm A. Clarke, St John s College, Cambridge, UKEnabling informed choices with regards to mass risk insurance is an aim pursued for decades now at both the national and European level. This book explores the extent to which the imposing of disclosure duties on the insurer may actually contribute to this end and where it inevitably reaches limits.Convinced that information problems cannot be solved by exclusively focusing on their legal dimension, the author provides the reader with a helpful overview of economic and behavior-orientated insights to the book's subject. Proceeding from these, the existing legal frameworks in the UK and Germany are critically analyzed and compared to more recent academic proposals for a future European insurance contract law. All of this is continuously supplemented by specific proposals for improvement.This inspiring book will be of use to scholars dealing with financial law and general questions of information policy. Insurance companies and lawyers dealing with cases first-hand will also find this to be a resourceful read.Trade Review‘This book is the result of a mind-bendingly huge amount of research. As such, it makes an invaluable contribution to the literature on at least one of the financial services industries which clearly need to put certain reforms in place. Loacker has started a very substantial debate which will continue for some years.’ -- Philip Taylor, MBE, Richmond Green Chambers‘This book is an important contribution to a question that has received little analysis hitherto, namely, what is and what are the effect(s) of the duties imposed on an insurer to provide information to prospective policyholders. As well as original analysis of English, German and prospective European law, and with insights from law and economics, it makes some key recommendations. It should be read by all academics, policymakers, professionals and regulators with an interest in insurance law.’ -- John Birds, University of Manchester, UK‘The serious reader will find here a first class monograph, well-structured and scholarly, with a clear perspective on some important issues arising in the law of insurance contracts today.’ -- From the foreword by Malcolm A. Clarke, St John’s College, Cambridge, UKTable of ContentsContents: Foreword by Malcolm A Clarke 1. Overview and Introduction 2. About Information and its Disclosure in General 3. Legal Basis for and Scope of Insurer's Pre-Contractual Information Duties 4. A Conclusion in Eight Final Observations Index

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Book SynopsisIslamic finance distinguishes itself from conventional finance with its strong emphasis on the moral consequences of financial transactions; prohibiting interest, excessive uncertainty, and finance of harmful business. When it comes to risk mitigation, it is unique in its risk sharing approach.This authoritative book tracks the evolution of the takaful industry over the course of the last four decades and makes a major attempt to highlight the importance of risk sharing through a discussion of various models of cooperation and critical analysis of their performance, including illuminating case studies and a critical assessment of the Islamic insurance model and the role of alternate financing mechanisms. Its high level discourse on shari'ah compliance and its nuances places emphasis on the importance of solidarity, cooperation, mutuality and reciprocity.Scholars and practitioners working in Islamic Finance will appreciate the context and nuance of this important book, and it will be essential reading for anyone interested in alternative forms of shari'ah compliant cooperative finance. The book is equally vital for academics and researchers interested in understanding various takaful models and their shari'ah considerations.Contributors include: A. Abozaid, A.U.F. Ahmad, A. Akhtar, S.N. Ali, H. Allam, M. Ayub, M. Al Bashir Al Amine, A. Bhatty, J.W. Bradford, S.E.B. Carmody, M.A. El-Gamal, M. Faisal, M.F. Haq, I. Bin Mahbob, A. Nana, V. Nienhaus, S. Nisar, U.A. Oseni, M. Rahman, A. Rehman, M.A. Samad, B. Shafiq, H. Sultan, A.-R. Syed, T.A. UddinTrade Review'This volume is probably the first of its kind in which the topic of takaful -- often neglected by literature -- is dealt with in a comprehensive fashion by leading academics and practitioners. The strength of the volume stems from its discussion of the ideas of mutuality and cooperatives, legal and regulatory frameworks, and the potential for takaful in social finance with a view towards sustainable development. Professors Ali and Nisar deserve congratulations for making this important and significant contribution to the literature on takaful.' --Zamir Iqbal, The World Bank Global Islamic Finance Development Center, Turkey'This book is a welcome addition to the literature on takaful, providing fresh perspectives, critical analysis and informative case studies which illustrate how Islamic insurance contributes to social finance in India and Indonesia. The principles of mutuality and solidarity are examined from different perspectives and the merits of a waqf-wakalah model are discussed. The legal and regulatory framework within which takaful operates is examined. The potential for shari ah-compliant cooperative financial services is assessed and a novel proposal is made for a lifetime annuity in family takaful. The standard of scholarship is impressive and Drs Nazim Ali and Shariq Nisar are to be congratulated in bringing together such a distinguished group of academics and professionals. The book is an essential purchase for libraries with collections in Islamic finance.' --Rodney Wilson, Durham University and INCEIF, Kuala LumpurTable of ContentsContents: Introduction PART I: INTRODUCTION TO TAKAFUL: FORM, FUNCTION AND CRITICISM 1. Takaful Journey: the Past and Present and Future Ajmal Bhatty and Shariq Nisar 2. Solidarity, Cooperation, and Mutuality in Takāful Volker Nienhaus 3. Mutuality, Reciprocity, and Justice within the Context of a Unified Theory of Riba and Ghara Mahmoud A. El-Gamal 4. A Proposed Marriage between Endowments, Mutual Insurance, and the Institution of Agency in Islamic Law—An Introduction to the Waqf-Wakalah Model of Takaful Abdullah Nana 5. A Critical Shari’ah Review of Takaful Structures: Towards a Better Model Abdulazeem Abozaid PART II: REGULATORY ENVIRONMENT AND LEGAL ASPECTS OF TAKAFUL 6. New Horizons: The Potential for Shari’ah-compliant Cooperative and Mutual Financial Services Sara E.B. Carmody 7. Toward a Watershed in Takaful Dispute Resolution: From Litigation to Effective Dispute Management Umar A. Oseni 8. Fatwā and its Role in Regulatory Capture and Arbitrage Joe W. Bradford PART III: TAKAFUL PRODUCT ANALYSIS 9. The Nature of Retakaful: Risk Sharing or Transferring Risks? Abu Umar Faruq Ahmad, Ismail Bin Mahbob and Muhammad Ayub 10. Commercial Credit Takaful Muhammad Al Bashir Muhammad Al Amine 11. Shari’ah Compliant High Watermark Protected Lifetime Annuity in Family Takaful? Hiba Allam and Volker Nienhaus PART IV: TAKAFUL AS SOCIAL FINANCE 12. Reimagining takaful: A New Model for Social Banking Hussam Sultan and Abdur-Rahman Syed 13. Islamic Co-operatives: A Route to Poverty Alleviation and Economic Development Mian Farooq Haq and Bushra Shafiq 14. Scaling Poverty Reduction in Indonesia: Enhancing the Institutional Effectiveness of Islamic Microfinance Institutions Tanvir Ahmed Uddin and Muhammad Maaz Rahman 15. Micro-takaful in India: A Path Towards Financial Inclusion and Sustainable Development Mohammad Faisal, Asif Akhtar, Asad Rehman and M. Abdul Samad Index

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Book SynopsisThis book will be a "must" for people who want good knowledge of big data concepts and their applications in the real world, particularly in the field of insurance. It will be useful to people working in finance and to masters students using big data tools. The authors present the bases of big data: data analysis methods, learning processes, application to insurance and position within the insurance market. Individual chapters a will be written by well-known authors in this field.Table of ContentsForeword xiJean-Charles POMEROL Introduction xiiiMarine CORLOSQUET-HABART and Jacques JANSSEN Chapter 1. Introduction to Big Data and Its Applications in Insurance 1Romain BILLOT, Cécile BOTHOREL and Philippe LENCA 1.1. The explosion of data: a typical day in the 2010s 1 1.2. How is big data defined? 4 1.3. Characterizing big data with the five Vs 5 1.3.1. Variety 6 1.3.2. Volume 7 1.3.3. Velocity 9 1.3.4. Towards the five Vs: veracity and value 9 1.3.5. Other possible Vs 11 1.4. Architecture 11 1.4.1. An increasingly complex technical ecosystem 12 1.4.2. Migration towards a data-oriented strategy 17 1.4.3. Is migration towards a big data architecture necessary? 18 1.5. Challenges and opportunities for the world of insurance 20 1.6. Conclusion 22 1.7. Bibliography 23 Chapter 2. From Conventional Data Analysis Methods to Big Data Analytics 27Gilbert SAPORTA 2.1. From data analysis to data mining: exploring and predicting 27 2.2. Obsolete approaches 28 2.3. Understanding or predicting? 30 2.4. Validation of predictive models 30 2.4.1. Elements of learning theory 31 2.4.2. Cross-validation 34 2.5. Combination of models 34 2.6. The high dimension case 36 2.6.1. Regularized regressions 36 2.6.2. Sparse methods 38 2.7. The end of science? 39 2.8. Bibliography 40 Chapter 3. Statistical Learning Methods 43Franck VERMET 3.1. Introduction 43 3.1.1. Supervised learning 44 3.1.2. Unsupervised learning 46 3.2. Decision trees 46 3.3. Neural networks 49 3.3.1. From real to formal neuron 50 3.3.2. Simple Perceptron as linear separator 52 3.3.3. Multilayer Perceptron as a function approximation tool 54 3.3.4. The gradient backpropagation algorithm 56 3.4. Support vector machines (SVM) 62 3.4.1. Linear separator 62 3.4.2. Nonlinear separator 66 3.5. Model aggregation methods 66 3.5.1. Bagging 67 3.5.2. Random forests 69 3.5.3. Boosting 70 3.5.4. Stacking 74 3.6. Kohonen unsupervised classification algorithm 74 3.6.1. Notations and definition of the model 76 3.6.2. Kohonen algorithm 77 3.6.3. Applications 79 3.7. Bibliography 79 Chapter 4. Current Vision and Market Prospective 83Florence PICARD 4.1. The insurance market: structured, regulated and long-term perspective 83 4.1.1. A highly regulated and controlled profession 84 4.1.2. A wide range of long-term activities 85 4.1.3. A market related to economic activity 87 4.1.4. Products that are contracts: a business based on the law 87 4.1.5. An economic model based on data and actuarial expertise 88 4.2. Big data context: new uses, new behaviors and new economic models 89 4.2.1. Impact of big data on insurance companies 90 4.2.2. Big data and digital: a profound societal change 91 4.2.3. Client confidence in algorithms and technology 93 4.2.4. Some sort of negligence as regards the possible consequences of digital traces 94 4.2.5. New economic models 95 4.3. Opportunities: new methods, new offers, new insurable risks, new management tools 95 4.3.1. New data processing methods 96 4.3.2. Personalized marketing and refined prices 98 4.3.3. New offers based on new criteria 100 4.3.4. New risks to be insured 101 4.3.5. New methods to better serve and manage clients 102 4.4. Risks weakening of the business: competition from new actors, “uberization”, contraction of market volume 103 4.4.1. The risk of demutualization 103 4.4.2. The risk of “uberization” 104 4.4.3. The risk of an omniscient “Google” in the dominant position due to data 105 4.4.4. The risk of competition with new companies created for a digital world 105 4.4.5. The risk of reduction in the scope of property insurance 106 4.4.6. The risk of non-access to data or prohibition of use 107 4.4.7. The risk of cyber attacks and the risk of non-compliance 108 4.4.8. Risks of internal rigidities and training efforts to implement 109 4.5. Ethical and trust issues 109 4.5.1. Ethical charter and labeling: proof of loyalty 110 4.5.2. Price, ethics and trust 112 4.6. Mobilization of insurers in view of big data 113 4.6.1. A first-phase “new converts” 113 4.6.2. A phase of appropriation and experimentation in different fields 115 4.6.3. Changes in organization and management and major training efforts to be carried out 118 4.6.4. A new form of insurance: “connected” insurance 118 4.6.5. Insurtech and collaborative economy press for innovation 121 4.7. Strategy avenues for the future 122 4.7.1. Paradoxes and anticipation difficulties 122 4.7.2. Several possible choices 123 4.7.3. Unavoidable developments 127 4.8. Bibliography 128 Chapter 5. Using Big Data in Insurance 131Emmanuel BERTHELÉ 5.1. Insurance, an industry particularly suited to the development of big data 131 5.1.1. An industry that has developed through the use of data 131 5.1.2. Link between data and insurable assets 136 5.1.3. Multiplication of data sources of potential interest 138 5.2. Examples of application in different insurance activities 141 5.2.1. Use for pricing purposes and product offer orientation 142 5.2.2. Automobile insurance and telematics 143 5.2.3. Index-based insurance of weather-sensitive events 145 5.2.4. Orientation of savings in life insurance in a context of low interest rates 146 5.2.5. Fight against fraud 148 5.2.6. Asset management 150 5.2.7. Reinsurance 150 5.3. New professions and evolution of induced organizations for insurance companies 151 5.3.1. New professions related to data management, processing and valuation 151 5.3.2. Development of partnerships between insurers and third-party companies 153 5.4. Development constraints 153 5.4.1. Constraints specific to the insurance industry 153 5.4.2. Constraints non-specific to the insurance industry 155 5.4.3. Constraints, according to the purposes, with regard to the types of algorithms used 158 5.4.4. Scarcity of profiles and main differences with actuaries 159 5.5. Bibliography 161 List of Authors 163 Index 165

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Book SynopsisThis timely Encyclopedia is a much-needed thorough reference on Islamic insurance policy and the ways in which this can be modelled to cohere with Shari'ah law. The authors explore the ways in which Islamic insurance can be halal, contradicting the widely held belief that insurance policies are not appropriate or moral, utilizing evidence from both the Qu'ran and top Islamic scholars to do so. The book explores Takaful, an insurance paradigm that is in accordance with Islamic principles and suits the needs of modern Islamic economies and communities. It examines the practices, principles, framework and importance of the notion of Takaful, using evidence from the Qu'ran and Islamic teachings to support this. Chapters examine how Takaful is different to conventional insurance models that are not permissible under Shari'ah law, contradicting misconceptions about the possibility of an insurance policy that is achievable within Islamic communities. The book further explores the room for cooperation between Takaful services and Islamic banking, offering insight into how this can be improved in the future. A valuable asset for Islamic insurance and Islamic economics scholars, this timely book offers a thorough analysis of Takaful, Retakaful and Islamic insurance in our modern world. It will also be a useful read for those practising Takaful to ensure that their advice coheres with Shari'ah law.Trade Review‘This volume is a good reference for those new to the field and a good guide for the pure qualitative and Islamic aspects of Takaful.’ -- Faizal Ahmad Manjoo, The Muslim World Book ReviewTable of ContentsContents: Preface Foreword Introduction Bibliography 1. A general introduction to Takaful 2. Understanding the pillars of Takaful 3. Regulatory framework of Takaful 4. Takaful and conventional insurance – A comparison 5. Practices of Takaful 6. Retakaful and its importance to Islamic Finance 7. Contemporary issues in Takaful implementation Index

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Book SynopsisThis thoroughly revised second edition of the Research Handbook on International Insurance Law and Regulation provides an updated assessment of the insurance industry in an international context, featuring 30 chapters, of which half are new for this edition, written by expert academics and practising lawyers.Produced in association with Lloyd’s of London, chapters provide in-depth studies on key areas including judicial interpretation of insurance contract clauses and transnational regulatory recognition, as well as overviews on important international jurisdictions such as the EU, Japan and the US. This comprehensive second edition critically analyses how insurance law and regulation have responded to the growth in sophisticated technology, the burgeoning climate crisis, and the development of new insurance structures.This Research Handbook will appeal to legal students and academics, particularly those with an interest in commercial law, finance and banking law, and insurance law. This book will also be beneficial for policymakers and private practice lawyers working in the commercial legal sector. Table of ContentsContents: Foreword xii Introduction to the second edition xiv Introduction to the first edition xxv PART I INSURANCE CONTRACT LAW 1 The shape of insurance contract law 2 James Davey 2 Methodology: how a law and economics approach has shaped insurance law 24 Peter Molk 3 Definition: the general and the parametric 36 Laura Burgoyne 4 Pre-contractual duties: the fair presentation of the risk – an English law approach 76 Peter MacDonald-Eggers KC 5 Contract terms: judicial approaches to the interpretation of insurance contracts 103 Oliver Brand 6 Claims: an overview of the US tort of ‘bad faith’ – a common law approach to regulating insurer claims-handling and settlements 133 Suzanne C. Midlige and William J. Metcalf 7 Reinsurance: finding the balance between reinsurers’ and reinsureds’ interests 165 Michael Mendelowitz and Rob Merkin KC 8 Closing books of business: the challenge of fairness and finality 192 Bob Haken and Simon Baker 9 Choice of law: New York and English approaches to insurance and reinsurance contracts 221 Raymond Cox KC PART II INSURANCE REGULATION 10 An introduction to insurance regulation 247 Peter Kochenburger and Patrick Salve 11 Systemic risk regulation: evolving approaches in insurance 281 Jeremy C. Kress, Patricia A. McCoy and Daniel Schwarcz 12 Competition: the insurance sector and the application of competition law – an overview 308 Edward W. Batchelor 13 Transnational supervisory recognition: a macro-jurisdictional overview 342 Hermann Geiger 14 Prudential supervision: capital standards in a risk-based solvency regime 367 Karel Van Hulle 15 Conduct of business regulation: a survey of the UK regime and a comparison with the US, German, French and Hong Kong approach 404 James Smethurst, Wessel Heukamp, Marc Perrone, Matthew O’Callaghan, Priti Lancaster and John Mulhern 16 Enforcement: a survey of the approaches taken to insurance regulatory enforcement in the United States of America and in the United Kingdom 438 Aviva Abramovsky, Dan D. Kohane, Farhaz Khan KC and Paul Bonner Hughes 17 Lloyd’s: the authorisation of Lloyd’s in the United Kingdom and overseas 467 Julian Burling 18 Lloyd’s: the development of performance management 499 Kevin Lazarus PART III DEVELOPING AREAS OF INSURANCE LAW AND REGULATION 19 Alternative risk transfer: insurance linked securities – their evolution, structures and regulation 523 Joseph Ferraro, Jennifer Tait and David Griffiths 20 Sustainability: the climate and nature crisis – a leadership role for insurance 551 Geoff Summerhayes, Laura Waterford, Nigel Brook, Wynne Lawrencea, and Zaneta Sedilekova 21 Data: the growth of risk-related data in insurance and protecting privacy 590 Brendan McGurk 22 Smart contracts: balancing innovation and consumer protection in insurance law and regulation 621 Miriam Goldby and Jeremmy Okonjo 23 Artificial intelligence: attempts at developing an ethical approach for its use in insurance 647 Anya Prince and Seamus Taylor PART IV REGIONAL STUDIES IN INSURANCE LAW AND REGULATION 24 Europe: the architecture and content of EU insurance regulation 675 Robert Purves 25 USA: A regulatory overview of the world’s largest insurance market 708 John Mulhern, Sara Manske and Robert Mancuso 26 Bermuda: regulating big insurance on a small island 728 Alex Potts KC and Jonathon O’Mahony 27 United Arab Emirates: developing insurance on the Arabian Peninsula 759 Sam Wakerley, John Barlow, Thomas Neighbour and Shane Gibbons HFW 28 China: insurance regulation in a rapidly evolving market 787 Carrie Yang 29 Japan: the insurance concept in the Insurance Act and the Insurance Business Act 810 Seiichi Ochiai, Shinichi Takahashi and Ryoko Takeda 30 The Republic of Korea: an overview of insurance law and regulation 835 Jae Hong Ahn, Partner, Kim, Chang, Sung Woo Huh, Kim Chang and Younghwa Paik Index 856

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Book SynopsisThis collected edition provides a comprehensive and practical roadmap for insurers, data scientists, technologists, and insurance enthusiasts alike, to navigate the data-driven revolution that is sweeping the insurance landscape.

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Book SynopsisOn the premise that pension provision in Europe will dramatically change over the next few decades, this book concentrates on the funded component of pension wealth, and specifically on annuities - financial products that, on the basis of actuarial equivalence, allow the conversion of wealth into a lifelong stream of income. Developing an Annuity Market in Europe provides an analysis of how longevity and return risks are dealt with, besides considering key features from both household and insurance company perspectives. It takes account of the fact that annuity markets are expected to attract much interest in future years given the prospective cuts in public pension expenditure. In order to fill the gap between shrinking pensions and desired retirement consumption, the authors argue, annuities must be well regulated and supplied with financially attractive products. These conditions hardly exist today: thin markets and scant interest prevail, information is incomplete and imperfect, products show significant disparities. The contributors to this book explore the causes of present malfunctioning and examine the changes that may give annuities a new and vital function, which, along with greater competition and greater regulation may significantly alter the present scene of pension finance.Finally, the book offers an overview of regulatory issues including transparency, prudential provisions, appropriate levels of guarantees, and administrative costs.This important and timely book will be invaluable to anyone interested in annuities, from practitioners through to students, researchers and academics concerned in financial or public economics.Trade Review'The book is highly recommended to anyone interested in this subject. There is a lack of contributions that deal adequately with issues such as the articulation of various pension schemes, horizontal and vertical equity, political choices, public versus private annuitisation, and so on. . . The main merit of Elsa Fornero and Elisa Luciano's work is their success in bringing together so many renowned experts and varied texts, and the book undoubtedly contributes to progress in knowledge about pensions, savings and welfare policies.' -- Life and Pensions MagazineTable of ContentsContents: 1. Introduction 2. Annuities for an Aging World 3. Issues in the Regulation of Annuities Markets 4. Annuity Risk: Volatility and Inflation Exposure in Payments from Immediate Life Annuities 5. Pension Annuitization and Social Security Claiming 6. Longevity Risk in Living Benefits 7. Guaranteed Annuity Conversion Options and their Valuation 8. The Behavior of UK Annuity Prices from 1972 to 2002 9. Private Annuities and Public Pensions in Germany 10. Mandated Annuities in Switzerland 11. The Market for Annuities in Italy: Reality or Chimera? Index

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Book SynopsisFinancial reform has been a major concern for China's transitional economy - especially in the realms of banking and insurance - since accession to the WTO in 2001. This book scrutinizes the development and limitations of these industries during the process of institutional transformation, and demonstrates that they are now facing severe challenges as well as opportunities. The relationships between the market structure, behavior and performance of China's banking and insurance industries are analysed. The strengths, weaknesses, opportunities and threat (SWOT) approach is utilized in investigating the impact of WTO accession on Chinese banking and insurance, and strategies for the prevention of future financial crises are prescribed. Exploring the juxtaposition of institutional transformation in China and the financial risk inherent in the old system, the book concludes that with WTO accession and the opening up of financial services to foreign companies, competitiveness will become fiercer, resulting in increased uncertainty, intensifying the level of risk even further. Banking and Insurance in the New China will prove invaluable to multinational enterprise managers, brokers, dealers and investors, business economists, students and academics with a specific interest in the Chinese economy.Table of ContentsContents: Preface 1. China’s Banking Industry During the Process of Institutional Transformation 2. The Evolution of China’s Insurance Market 3. The Impact of WTO Accession on China’s Banking and Insurance Industries 4. Empirical Analysis of Market Structure, Behavior and Performance 5. Perspectives References Index

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