This article presents three different methods of the risk analysis as well as highlighting their disadvantages, advantages and primary areas of application (selection or pre-estimation). These methods differ in their methodology from each other. The areas of application and analytical capacity of the listed methods are illustrated with the short examples, simultaneously outlining their characteristics from the analysis. The research problems, which are the canvas of application of the discussed methods are not mutually interrelated.

Abstract - Households buy life insurance as part of their liquidity management. The option to surrender such a policy can serve as a buffer when a household faces a liquidity need. In this study, we investigate empirically which individual and household specific sociodemographic factors influence the surrender behaviour of life insurance policyholders. Based on the Socio-Economic Panel (SOEP), an ongoing wide-ranging representative longitudinal study of around 11,000 private households in Germany, we construct a proxy to identify life insurance surrender in the data.

Abstract - Flood Re is widely hailed as an innovative approach to disaster risk insurance. This paper offers a mixed-methods evaluation of the new pool, asking whether it is “fit for purpose” and “fit for the future.” The investigation considers the roles of the public and private sectors, risk modelling and risk communication, technical underwriting, distributional aspects and the behavioural implications of Flood Re, particularly with regards to risk reduction and prevention.

This paper sets out the rationale for the IAIS's revisions to the NTNI definition and a detailed description of Potentially Systemic Insurance Product Features.

This paper aims at identifying and analysing the sources of systemic risk in insurance from a conceptual point of view. Its content shall not prejudge or establish any link with any kind of policy measures developed by the IAIS.

This paper presents latest thinking from the Institute and Faculty of Actuaries' (IFoA) Model Risk Working Party and follows on from their Phase I work, Model Risk - Daring to Open the Black Box. This is a more practical paper and presents the contributors' experiences of model risk gained from a wide range of financial and non-financial organisations with suggestions for good practice and proven methods to reduce model risk.

A central problem for regulators and risk managers concerns the risk assessment of an aggregate portfolio defined as the sum of d individual dependent risks (Xi). This problem is mainly a numerical issue once the joint distribution of (X1,X2,...,Xd) is fully specified. Unfortunately, while the marginal distributions of the risks (Xi) are often known, their interaction (dependence) is usually either unknown or only partially known, implying that any risk assessment of the portfolio is subject to model uncertainty.

This paper evaluates the model risk of models used for forecasting systemic and market risk. Model risk, which is the potential for different models to provide inconsistent outcomes, is shown to be increasing with market uncertainty. During calm periods, the underlying risk forecast models produce similar risk readings; hence, model risk is typically negligible. However, the disagreement between the various candidate models increases significantly during market distress, further frustrating the reliability of risk readings.

Contagion across banks is widely perceived to be an important element in banking crises and thus a major systemic stability concern. This special feature analyses the risk of crossborder contagion for large European banks. The main objective of the article is to draw attention to a potentially highly relevant financial stability issue, which so far may have been under-explored.

The Financial Reporting Section and Committee on Life Insurance Research announce the release of a new report examining current practice around the development of policyholder behavior assumptions for life insurance and annuity products.