Description: Panel discussion focused on the Effective Use of Capital. Topics included: 1. Definition of capital 2. Appropriate level of capital and surplus in a life insurance company 3. Alternatives for deploying capital 4. Returns a life company should demand on invested capital 5. How much a company should charge for lending its capital in reinsurance transactions

Description: It is well-known that reinsurance can be an effective risk management technique for an insurer. An appropriate use of reinsurance reduces the adverse risk exposure of an insurer and improves the overall viability of the underlying business. The use of reinsurance, on the other hand, incurs additional cost to the insurer in the form of reinsurance premium. This implies that an insurer is faced with a classic tradeoff between risk spreading and risk retaining. The thrust of my research is to propose some reinsurance designs that are optimal from the perspective of an insurer. This presentation describes an empirical approach to optimal reinsurance designs. This new method has the advantage that it does not need to make any explicit assumptions on the distribution of the underling risk. More importantly, it provides a simple and yet practical way of obtaining solution on a wide range of optimal reinsurance models.

Description: From 2000 Valuation Actuary Symposium Panel discussion which provides an overview of the current uses of reinsurance, focusing on recent developments and issues. Panelists discussed application of reinsurance to specific products and lines of business and its use as a financial management tool in: • Term insurance • Mortality stabilization • Earnings volatility stabilization • Variable life and annuities and other investment-oriented products Generally Accepted Accounting Principles GAAP treatment of reinsurance e.g., FAS 113 and due diligence issues in selecting reinsurers and maintaining reinsurance arrangements is also discussed. Finally, panelists discussed advantages of onshore and offshore reinsurance transactions.

Description: Panelists discuss: [1] relationships with your reinsurer, [2] reinsurance administration, [3] setting retentions, and [4] financial reinsurance and the regulator. From the 1987 Record of Society of Actuaries, Vol. 13, No. 2.