Wir vergleichen die Ausgestaltung des deutschen Aufsichtsrats und des schweizerischen Verwaltungsrats und die besonderen Regelungen für Versicherer in diesen beiden Ländern. Die Regulierung beider Gremien ist ähnlich, wobei das Mandat des Verwaltungsrats grundsätzlich umfangreicher ist als das des Aufsichtsrats. Schweizer Richtlinien haben meist einen weniger bindenden Charakter als die deutschen und lassen dem Versicherungsunternehmen mehr Freiraum. Wir nehmen eine Evaluation der Regulierung anhand wissenschaftlicher Studien vor und schlussfolgern, dass die Schweizer Regulierung passgenauer und effektiver erscheint. Des Weiteren vergleichen wir die Regulierung der Aufsichtsgremien von Versicherungsunternehmen je nach Rechtsform. In beiden Ländern ist die Regulierung für börsenkotierte Aktiengesellschaften am meisten ausgeprägt, wobei die Unterschiede generell eher gering sind.
We empirically analyze the costs and benefits of financial regulation based on a survey of 76 insurers from Austria, Germany and Switzerland. Our analysis includes both established and new empirical measures for regulatory costs and benefits. This is the first paper that tries to take costs and benefits combined into account using a latent class regression with covariates. Another feature of this paper is that it analyzes regulatory costs and benefits not only on an industry level, but also at the company level. This allows us to empirically test fundamental principles of financial regulation such as proportionality: the intensity of regulation should reflect the firm-specific amount and complexity of the risk taken. Our empirical findings do not support the proportionality principle; for example, regulatory costs cannot be explained by differences in business complexity. One potential policy implication is that the proportionality principle needs to be more carefully applied to financial regulation.
This paper analyzes the equity risk module of Solvency II, the new regulatory framework in the European Union. The equity risk module contains a symmetric adjustment mechanism called equity dampener which shall reduce procyclicality of capital requirements and thus systemic risk in the insurance sector. We critically review the equity risk module in three steps: we first analyze the sensitivities of the equity risk module with respect to the underlying technical basis, then work out potential basis risk (i.e., deviations of the insurers actual equity risk from the Solvency II equity risk), and-based on these results-measure the impact of the symmetric adjustment mechanism on the goals of Solvency II. The equity risk module is backward looking in nature and a substantial basis risk exists if realistic equity portfolios of insurers are considered. Both results underline the importance of the own risk and solvency assessment (ORSA) under Solvency II. Moreover, we show that the equity dampener leads to substantial deviations from the proposed 99.5% confidence level and thereby reduce procyclicality of capital requirements. Our results are helpful for academics interested in regulation and risk management as well as for practitioners and regulators working on the implementation of such models.
The aim of this paper is to analyse the impact of both firm-specific and external factors on the risk taking of European insurance companies. The extent of risk taking is quantified through variations in stock prices and these are explained by firm-specific and external factors that proxy the environment in which the insurers are active. Using a two-way panel regression analysis with fixed and random effects, our empirical study covers hand-collected data on 35 German and UK insurance companies for the period 1997 to 2010. We find that differences in company size, capital structure, liquidity, and economic development affect variations in stock prices. The analysis also highlights differences between the market-based UK corporate governance system and the control-based regime implemented in Germany, with the UK exhibiting a higher level of risk, compensation, and board independence. We also document increases in the volatility of insurance stock returns during the financial crisis..
The aim of this paper is to analyze the impact of underwriting cycles on the risk and return of non-life insurance companies. We integrate underwriting cycles in a dynamic financial analysis framework using a stochastic process, specifically, the Ornstein-Uhlenbeck process, which is fitted to empirical data and used to analyze the impact of these cycles on risk and return. We find that underwriting cycles have a substantial influence on risk and return measures. Our results have implications for managers, regulators, and rating agencies that use such models in risk management, e.g., to determine risk-based capital requirements.
We analyze the impact of factors related to corporate governance (i.e., compensation, monitoring, and ownership structure) on risk taking in the insurance industry. We measure asset, product, and financial risk in insurance companies and employ a structural equation model in which corporate governance is modeled as a latent factor. Based on this model, we present empirical evidence on the link between corporate governance and risk taking, considering insurers from two large European insurance markets. Higher levels of compensation, increased monitoring (more independent boards with more meetings), and more blockholders are associated with lower risk taking. Our empirical results provide justification for including factors related to corporate governance in insurance regulation.
In dieser Arbeit analysieren wir Versicherungszyklen in der deutschen KFZ-Versicherung anhand von Daten der letzten 50 Jahre. Ein besonderes Augenmerk wurde dabei auf den so genannten Aggregations-Bias gelegt, der durch die Zusammenfassung verschiedener Versicherungszweige zu einer Gesamtmarktstatistik entsteht. In der Literatur wurden Versicherungszyklen bereits für viele internationale Märkte und für zahlreiche Versicherungszweige berechnet. Auch in der deutschen KFZ-Versicherung sind Zyklen auffindbar. Je nach betrachtetem Zeitfenster und Versicherungszweig lassen sich Werte zwischen etwa sechs und zehn Jahren identifizieren, wobei in den letzten Jahren ein leichter Anstieg zu beobachten ist. Die berechneten Zykluslängen lassen sich dabei gut in den Kontext internationaler Vergleichsstudien einordnen.
This paper analyzes price competition in the German motor insurance market since 1994 and looks for evidence to back up a claim frequently found in the trade literature-that there have been two recent price wars in this industry, the first in 1996-1999, the second in 2005-2006. In a first step, we analyze development of the German motor insurance market and compare it to that of other property-liability lines of business. In a second step the applicability of price war definitions found in the marketing literature to the German motor insurance market is checked. In a third step, a comparison to reference cases from other industries, where price wars have been subject to academic analysis, is conducted to complement the analysis. We conclude that, contrary to reports in the trade literature, the periods of 1996-1999 and 2005-2006 should be considered as times of in-tense competition in the motor insurance industry, not as times of price war.
