Financial Risk Management for Insurance Companies

Global demographic changes and calamities such as the Asian Tsunami, the swine flu, Hurricanes Katrina and Rita, and the avian flu, have forced domestic and international insurance companies to focus not only on what products they offer but also how to improve their asset and liability management, along with their financial risk management processes and systems.

Increasingly, insurance companies have become very active in utilizing a wide range of OTC and exchange traded derivatives to hedge their market and credit risks. The last few years have seen resurgence in the issuance of insurance-linked instruments, such as property catastrophe bonds, securities funding life insurance reserves, insurance risk swaps, and Industry Loss Warranties (ILWs).

Insurance company risk managers and financial professionals focusing on the insurance sector would learn the process by which insurance companies are identifying, measuring, monitoring and controlling their financial risks. This course will be supplemented by domestic and international case studies and recent articles on topical themes in the insurance sector.

24-Oct-2012 -- 25-Oct-2012New YorkUSD$2475
NY Institute of Finance - Midtown9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ Mayra Rodríguez Valladares; ] Wed Thu Level: Basic

CPE CREDITS
14.0
Insurance company risk managers, finance risk professionals, and auditors.
No advance preparation required.
Students will be able to:
  • Identify key regulatory changes affecting the insurance sector
  • Evaluate recent trends in natural disasters and terrorism and their effect on insurance companies
  • Describe key products in insurance companies that have embedded derivatives
  • Identify financial derivatives being used by insurance companies to hedge risks
  • Identify and apply mechanics of insurance specific derivatives
  • Compare and contrast capital market solutions being used by insurance and reinsurance companies
A basic understanding of the insurance industry.
  • Risk Management Suite
  • Derivatives in Energy Markets
    • Day 1
    Module I: Lessons Learned in the Insurance Sector
    • Effect of terrorism globally
    • Influence of natural disasters
    • Coping with pandemic crisis - swine flu, avian flu
    • Impact of litigation
    • Coping with the financial crisis - European and American insurance companies

    Module II: Risk Management at Insurance Companies

    • Compliance vs. risk based
    • Key risks in insurance companies
    • Risk management process

    Case Study

      Module III: Insurance Products with Embedded Derivatives

      • Annuities
      • Life policy riders

      Module IV: Traditional Financial Derivatives Used by Insurance Companies

      • Assets and liabilities that need to be hedged
      • Insurance companies use of: forwards, swaps, futures, options

      Case Study

    Day 2
    Module V: Insurance Related Derivatives
    • Identify mechanics and risks of: property catastrophe bonds; insurance risk swaps; securities funding life insurance reserves; Industry Loss Warranties (ILWs)

    Case Study

      Module VI: Insurance Capital Market Solutions

      • Identify mechanics and risks of: contingency capital solutions; hybrid capital; private equity

      Case Study

        Module VII: Future Outlook for Insurance Companies

        • Influence of regulation: US - new national insurance regulator; Europe - influence of Solvency II on capital requirements
        • Changing risk management practices
        • New product trends

    Clients who register for this course will receive a complimentary 4-month subscription to FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. The move to the electronic version follows an ongoing review of our environmental responsibilities as a global business and as part of the Pearson group. FT.com also has features that are not available in hard copy, such as: Special Reports, Alphaville, editor blogs, education sections and much more! Subscriptions will start within 6-8 weeks of the start of class and are limited to one subscription per client. (Please note: as of May 1, 2011, the electronic subscription replaces the hard-copy 3-month Financial Times subscription.)

    Lunch is included for all students taking day classes.