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Performance of Insurance Companies in India:
A Comparison of Public and Private Insurers
-- Debabrata Das and Jasojit Debnath
Liberalization of the insurance market in India gave entry to many private insurers, resulting in drastic changes in respect to people’s choice of companies. With the expansion of the market, insurance penetration and density of the country are getting better, leading to a competition within the companies in terms of policies sold, collection of premium income, settlement of claims and others. Companies are employing different marketing channels, apart from the conventional channel of marketing through individual agents, to stay in the competition. The present paper is thus an attempt to highlight the performance of life insurance market in terms of different parameters, and also to throw light on the different marketing channels employed. © 2011 IUP. All Rights Reserved.
A SWOT Analysis of Sri Lankan Insurance Sector
--S Sankaramuthukumar and K Alamelu
This article evaluates the performance of the Sri Lankan insurance sector with regard to life insurance and general insurance. The authors have ranked the Sri Lankan insurance companies on the basis of growth efficiency in order to make Strengths, Weaknesses/Limitations, Opportunities and Threats (SWOT) analysis of the Sri Lankan insurance industry. The study reveals that the insurance density and penetration is one of the lowest among the Asian countries. However, the growth rate of insurance density was above the world average, except for 2001 and 2009. Besides, life insurance penetration and density was lower than the general insurance penetration and density. The research tools for this study are correlation analysis and standard deviation. The hypothesis—the performance of life insurance business is more consistent than the performance of general insurance business—has been proved. It is also proved that there was a high (0.949) positive correlation between the Sri Lankan insurance density and world insurance density during 2000-2009. © 2011 IUP. All Rights Reserved.
Fair Valuation of Mortgage Insurance with Current
Loan-to-Value and Debt Service Ratios
-- Yang-Che Wu and Chin-Yuan Lin
This study advances the mortgage insurance pricing literature by providing theory and methods for incorporating both equity and ability-to-pay theories (Jackson and Kasserman, 1980). We develop a new option-based model by adding the current loan-to-value and debt service ratios to the pricing process of mortgage insurance (MI). Specifically, the MI is regarded as a portfolio of a series of put options to obtain the analytical pricing formulas. Under the consistent pricing framework, we also derive three types of MI contracts designed for different purposes: full MI can compensate mortgage lenders for default loss; maximum claim policies provide insurers with a limit loss; and partial indemnity policies can be adjusted to different insurance coverage for borrowers’ default losses. Finally, we conduct numerical and empirical analyses to evaluate how different designs of MI relate to insurance premiums, and to examine how housing price dynamics and income flow affect insurance premiums. © 2011 IUP. All Rights Reserved.
On Dynamic Solvency Insurance Contract
-- Cristina Gosio, Ester C Lari and Marina Ravera
In the framework of collective risk theory models, the dynamic solvency insurance contract is studied. Whenever the reserve falls below the ruin level, such a contract provides a payment in the amount of the deficit. The paper focuses on the net single premium of solvency insurance by considering two different definitions of ruin, referring to models modified by the inclusion of an upper reflecting barrier. The main results are integral and integro-differential equations for the net single premium. An exact solution is given in the special case with exponential claim sizes and zero interest force. © 2011 IUP. All Rights Reserved.
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