Systemic Risk and The U.S. Insurance Sector
type="main" xml:lang="en"> <title type="main">Abstract</title> <p>This article examines the potential for the U.S. insurance industry to cause systemic risk events that spill over to other segments of the economy. We examine primary indicators of systemic risk as well as contributing factors that exacerbate vulnerability to systemic events. Evaluation of systemic risk is based on a detailed financial analysis of the insurance industry, its role in the economy, and the interconnectedness of insurers. The primary conclusion is that the core activities of U.S. insurers do not pose systemic risk. However, life insurers are vulnerable to intrasector crises, and both life and property–casualty insurers are vulnerable to reinsurance crises. Noncore activities such as financial guarantees and derivatives trading may cause systemic risk, and interconnectedness among financial institutions has grown significantly in recent years. To reduce systemic risk from noncore activities, regulators need to continue efforts to strengthen mechanisms for insurance group supervision. </section>
Year of publication: |
2014
|
---|---|
Authors: | Cummins, J. David ; Weiss, Mary A. |
Published in: |
Journal of Risk & Insurance. - American Risk and Insurance Association - ARIA, ISSN 0022-4367. - Vol. 81.2014, 3, p. 489-528
|
Publisher: |
American Risk and Insurance Association - ARIA |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Chen, Hua, (2018)
-
Economies of scope in financial services : a DEA efficiency analysis of the US insurance industry
Cummins, John David, (2010)
-
Convergence of insurance and financial markets : hybrid and securitized risk-transfer solutions
Cummins, John David, (2009)
- More ...