Insurance and Issues in Financial Soundness

By Udaibir S Das, Richard Podpiera, Nigel Davies

July 1, 2003

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Format: Chicago

Udaibir S Das, Richard Podpiera, and Nigel Davies. Insurance and Issues in Financial Soundness, (USA: International Monetary Fund, 2003) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper explores insurance as a source of financial system vulnerability. It provides a brief overview of the insurance industry and reviews the risks it faces, as well as several recent failures of insurance companies that had systemic implications. Assimilation of banking-type activities by life insurers appears to be the key systemic vulnerability. Building on this experience and the experience gained under the FSAP, the paper proposes key indicators that should be compiled and used for surveillance of financial soundness of insurance companies and the insurance sector as a whole.

Subject: Capital adequacy requirements, Commercial banks, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Financial soundness indicators, Insurance, Insurance companies

Keywords: Asset risk, Banking sector, Capital adequacy requirements, Commercial banks, Current liabilities, Economic expansion, Europe, Financial crisis, Financial situation, Financial soundness indicators, Financial stability, Financial system, Insurance, Insurance companies, Management risk, Market risk, Market share, Market value, Net premium, North America, Pass-through products, Retention ratio, Return on assets, Return on equity, Soft market, Soundness indicators, WP

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/138
Stock No:

WPIEA1382003
ISBN:

9781451856002
ISSN:

1018-5941

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