Purpose The purpose of this paper is to examine the evolution of interconnectedness of European insurers among themselves, as well as with other non-financial firms, for the period 2000–2021 and to ...analyze the stock return movements around the costliest catastrophic events (hurricanes) in the past two decades. Design/methodology/approach This paper follows the “simple” approach of Patro et al.(2013) and examines the daily stock return correlations of the largest 30 insurers and the largest 30 non-financial firms headquartered in Europe. In addition, the study uses event study methodology to examine stock return movements around the costliest hurricanes. Findings We find that the European insurance sector has become highly interconnected during the past two decades; however, its increasing connectedness with non-financial firms is limited to a few firms. In addition, we find weak evidence of the destabilizing effects of catastrophic events on European insurers and non-financial firms; however, the potential for cat risk contagion effects exists as the insurance industry becomes heavily interconnected. Originality/value The extant literature is largely concerned with the contribution of the insurance sector to the systemic risk of the financial sector. We focus on a specific region (Europe) and analyze the evolution of interconnectedness of the largest insurers within the insurance sector as well as with the largest non-financial firms encapsulating important crisis periods. In addition, we relate to the literature that examines the market reactions around catastrophic events to test the relevance of traditional insurance activities in instigating potential contagion shocks.
The Federal Reserve System was established to supplant the private interbank system, which was widely seen as a source of instability. We examine how the Fed's presence affected the interbank ...system's resilience to solvency and liquidity shocks and whether those shocks might have been contagious. The interbank system became more resilient to solvency shocks but less resilient to liquidity shocks as banks sharply reduced their liquid assets after the Fed's founding. The industry's response illustrates how the introduction of a lender of last resort can alter private behavior in ways that increase the likelihood that the lender will be needed.
This paper aims to examine solvency and fixed assets financing of Agriculture, Forestry and Fishing sector (Sector A) in the Republic of Serbia. We also examine whether there is a difference between ...this Sector’s enterprises and entrepreneurs regarding these two aspects of their financial position. The research is based on the Financial Statements Annual Bulletins available on the official website of the Serbian Business Registers Agency. The period of six consecutive years is covered (2013-2018). Solvency and fixed assets financing were analyzed separately for Sector A enterprises and entrepreneurs. Standard ratio indicators were used to determine these relevant aspects of financial position. The conducted analysis showed differences between this Sector’s enterprises and entrepreneurs regarding the solvency. The research results revealed that, despite a slight improvement in certain solvency indicators, entrepreneurs were insolvent during the observed period. The fixed assets financing indicators showed that the lack of equity for new investments financing was compensated mainly by long-term borrowing at enterprises’ level and by short-term borrowed sources at entrepreneurs’ level.
The main goal of the paper is the evaluation of the Solvency Need
S
N
(
h
), where
h
is the maximal duration of the insurance contracts that we will consider. We define it as the quantile of
R
(
h
,
...S
) − 𝔼
R
(
h
,
S
), where
R
(
h
,
S
) is the reserve introduced in Nichil and Vallois (Insurance: Mathematics and Economics 66:29–43,
2016
) and
S
:= (
S
x
,
x
⩾ 0) is a systemic risk. We prove that the normalized reserve converges in distribution, as
h
→ +
∞
, to the sum of a Gaussian RV and an independent RV which is an integral of a function of the systemic risk. In the case of mortgage guarantee we can go further in the description of the non-Gaussian RV and we propose three numerical schemes to estimate
S
N
(
h
) when
h
is large and we compare the results of simulation.
The Medicare program faces increasing budgetary pressures, with recent estimates suggesting that the Medicare Hospital Insurance Trust will be insolvent as soon as 2028. Simultaneously, the Medicare ...Advantage (MA) program, a managed competition model, continues to grow its market penetration as beneficiaries increasingly choose private plans over traditional fee for service (FFS) Medicare. With the relative cost of the 2 forms of Medicare a subject of debate, policy experts have proposed a variety of policy options to address the program’s budgetary pressures and place it on a firmer fiscal footing. This paper explores the implementation of one of these proposals in greater detail: fully transitioning the entire Medicare program to a competitive bidding model in order to reduce overall program costs and improve price competition. Current MA plan bidding methodology is explored, followed by a description of prior proposed competitive bidding models. Implementation challenges are addressed, along with specific policy considerations to protect beneficiaries who wish to remain in FFS Medicare.
The replicating portfolio (RP) approach to the calculation of capital for life insurance portfolios is an industry standard. The RP is obtained from projecting the terminal loss of discounted ...asset–liability cash flows on a set of factors generated by a family of financial instruments that can be efficiently simulated. We provide the mathematical foundations and a novel dynamic and path-dependent RP approach for real-world and risk-neutral sampling. We show that our RP approach yields asymptotically consistent capital estimators if the chaotic representation property holds. We illustrate the tractability of the RP approach by three numerical examples.
Aqueous solubility of acetaminophen in the presence of 1-hexyl-3-methyl imidazolium bromide, ionic liquid as co-solvent was investigated at different temperatures and mass fraction of ionic liquid. ...The obtained results reveal that the solubility of acetaminophen was increased by increasing temperature and concentration of ionic liquid. Thermodynamic functions of dissolution, mixing and transfer process were calculated by Van’t Hoff equation. The experimental solubility of acetaminophen was correlated with the Wilson and NRTL models as activity coefficient model. The obtained average relative deviations indicate that the experimental solubility of acetaminophen in aqueous ionic liquid solution has a good correlation with the Wilson and NRTL models.
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•Aqueous solubility of acetaminophen in presence1-hexyl-3-methyl imidazolium bromide, ionic liquid was investigated.•Aqueous solubility of acetaminophen increased by increasing temperature and concentration ionic liquid.•The solubility of acetaminophen was correlated with the Wilson and NRTL models.
We study information acquisition and dynamic withdrawal decisions when a spreading rumor exposes a solvent bank to a run. Uncertainty about the bank's liquidity and potential failure motivates ...depositors who hear the rumor to acquire additional noisy signals. Depositors with less informative signals may wait before gradually running on the bank, leading to an endogenous aggregate withdrawal speed and bank survival time. Private information acquisition about liquidity can subject solvent-but-illiquid banks to runs, and shorten the survival time of failing banks. Public provision of solvency information can mitigate runs by indirectly crowding-out individual depositors' effort to acquire liquidity information.
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