Throughout the past year, on-site visits to financial service firms were conducted to review and evaluate their risk management systems. In the insurance sector, this evaluation covered a number of prominent life/health and property/casualty insurers, both in the U.S. and abroad. The information...

In this paper, we discuss the relation between the market value of insurance company owners' equity and various components that contribute to that value. The effect of firm insolvency risk on each component of value is discussed in turn. One natural consequence of this analysis is a conceptual...

A price pressure effect is implied by segmentation in the market for a security. An empirical property of a segmented market is that the price of the security is sensitive to supply and demand conditions for that specific security, absent changes in risk and absent any new information. This...

Recently much attention has been given to the approaches insurers undertake in valuing their liabilities and assets. For example, in 1994 the American Academy of Actuaries created a Fair Valuation of Liabilities Task Force to address the issue. In 1997, the Academy established a Valuation Law...