Читать книгу Risk Management and Financial Institutions - Hull John C. - Страница 41

The most obvious risk for an insurance company is that the policy reserves are not sufficient to meet the claims of policyholders. Although the calculations of actuaries are usually fairly conservative, there is always the chance that payouts much higher than anticipated will be required. Insurance companies also face risks concerned with the performance of their investments. Many of these investments are in corporate bonds. If defaults on corporate bonds are above average, the profitability of the insurance company will suffer. It is important that an insurance company's bond portfolio be diversified by business sector and geographical region. An insurance company also needs to monitor the liquidity risks associated with its investments. Illiquid bonds (e.g., those the insurance company might buy in a private placement) tend to provide higher yields than bonds that are publicly owned and actively traded. However, they cannot be as readily converted into cash to meet unexpectedly high claims. Insurance companies enter into transactions with banks and reinsurance companies. This exposes them to credit risk. Like banks, insurance companies are also exposed to operational risks and business risks.

Regulators specify minimum capital requirements for an insurance company to provide a cushion against losses. Insurance companies, like banks, have also developed their own procedures for calculating economic capital. This is their own internal estimate of required capital (see Chapter 26).