Economic-financial analysis for insurance and reinsurance company

Authors

  • Titel NEGRU Lecturer Ph.D. Faculty of Finance and Banks Spiru Haret University

Keywords:

profitability, profit testing, embedded value, value added, variability JEL Classification,

Abstract

An insurance company has a value as well as its contracts. The efficiency of a company or of a Profit Centre is measurable and the profitability of an insurance product may be quantified. It is possible to assess both company and its products, and take appropriate decisions by using precise criteria. There are methods that satisfy this classic need of evaluation. For the first part of this paper, we will examine the methods like Profit Testing, Embedded Value, Value Added and Total Rate of Return in the context of an endowment insurance product. Then, along with the same example, we will present a critical approach of these methods. We will see that these methods are not always easy to understand and that sometimes the Value Added and the Total Rate of Return are not able to directly show the profitability. Finally, we will perform a sensitivity analysis in order to determine the most influential parameters. This study includes examples of an endowment, a term insurance and an annuity.Data presedent in this article are hypothetical. 

References

Ionescu R., Novac L., Asigurări comerciale moderne, C.H. Beck, Bucharest, 2007.

Lamberge H., Economie et finance d’assurance et de la reassurance, Dalloz Publishing House, Paris, 1981.

Popovici D., Teoria şi tehnica asigurărilor, reasigurărilor de persoane, Orizonturi Universitare Publishing House, Timişoara, 2007.

Şeuleanu V., Barna F., Herbei R., Mutacu M., Răileanu M., Asigurări comerciale, Mirton Publishing House, Timişoara, 2008.

Văcărel I., Bercea F., Asigurări şi reasigurări, Expert Publishing House, Bucharest, 2006.

Văduva M., Asigurări, Mirton Publishing House, Timişoara, 2006.

William A. Heins R., Risk, Management and Insurance, Mc Gran Hill Book Company, 1989.

Zeatman Perome M., Manual de l’assurance, Economica Publishing House, Paris, 2006.

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Published

2010-12-20

How to Cite

NEGRU, T. (2010). Economic-financial analysis for insurance and reinsurance company. Annals of Spiru Haret University. Economic Series, 10(4), 93–99. Retrieved from https://anale.spiruharet.ro/economics/article/view/1049

Issue

Vol. 10 No. 4 (2010)

Section

ACADEMIA PAPERS

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