Description: This article presents the results of the survey interviews, examining best practices as well as those areas that still remain challenging.

Description: A discussion about the increasing risks associated with the National Flood Insurance Program in the U.S., including discussion of its history as well as key issues associated with its continuation in its present form.

Description: This article discusses the impact of increasing activity with respect to Solvency II in the United States.

Description: The United States Geological Surv ey USGS released the latest version of its National Seismic Hazard Maps NSHM in April 2008. The maps, which were last updated in 2002, define the latest scientific view of earthquake hazard at varying probability levels across the United States.

Description: This article demonstrates and explains the differences between the current Canadian and U.S. capital regimes on life insurance companies. The concept and framework of regulatory capital is first introduced and Canadian regulation capital requirements—minimum continuing capital and surplus requirements (MCCSR) and U.S. regulation capital-risk based capital (RBC)—is explained and compared.

Description: This article discusses how risk management was a central element in the conduct of monetary policy in the United States as espoused by then Fed Chairman Alan Greenspan .

Description: In this article, the author discusses earthquake modeling.

Description: Life and annuity markets around the world have seen increasingly complex investment-combined products, including universal life, fixed indexed annuities, variable annuities with a wide variety of guaranteed benefits and indexed variable annuities. Insurance companies are facing unprecedented exposure to financial risks in addition to traditional mortality and longevity risks. The risk assessment and modeling for such complex designs by conventional methods often focus heavily on their market competitiveness and profitability. However, there seems to be a lack of quantifiable and systematic approaches to assess investment risks associated with investment combined products. The objective of the proposed work is to develop a framework for quantifying and analyzing various forms of contractual designs and showcase different techniques to assess the trade-off between competitive contractual designs and their practical implications regarding the difficulty of risk management.

Description: Joint Risk Management Section chairperson's corner, June 2023

Description: This paper applies the research in Prospect Theory of Kahneman and Tversky to explain why sales of annuities lag sales of life insurance products. The author theorizes that life insurance is easier to sell because customers perceive themselves to be in the domain of losses, while potential annuity customers perceive themselves to be in the domain of gains. Kahneman and Tversky showed us that people are mostly risk averse in the domain of gains and risk seeking in the domain of losses. Purchase of an annuity or life product is a risky investment. Customers will find it easier to take the risk in the life insurance domain of losses than the annuity domain of gains. The author then proposes a hybrid life annuity product that might address both mortality and longevity risk in one product that would allow both products to be more competitive than stand-alone products.