Journal of Insurance and Finance 2021 KCI Impact Factor : 0.67

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pISSN : 2384-3209

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2012, Vol.23, No.4

  • 1.

    A Study on the Effects of Economic Variables on Lapse Rates of Variable Annuity and Variable Universal Life Insurance

    YONGJAE KWON , Yun, Jeongsun , Lee Jaimin | 2012, 23(4) | pp.3~28 | number of Cited : 12
    Abstract PDF
    Using cointegration technique and vector error correction model, we analyze how lapses of variable annuity(VA) and variable universal life insurance(VULI) respond to shocks to economic variables as well as each of themselves. Business leading indicator, CD rate, consumer price index(CPI), and unemployment rate are chosen as economic variables. We find that variable annuity and variable universal life insurance both showed negative responses to a shock from business leading indicator and CPI while they showed positive responses to a shock from themselves and unemployment rate. Variable annuity shows positive response to a shock from CD rate while variable universal life insurance does not. Variable universal life insurance show positive response to a shock from KOSPI while variable annuity does not. This is because lower levels of restrictions on fund selection are given to VULI when policyholders invest in equity funds or mixed funds.
  • 2.

    A Study on Organizational Outcome of Life Insurance Solicitors Using Negative Binomial Regression Model

    Heuiju Chun , 안철경 | 2012, 23(4) | pp.29~60 | number of Cited : 24
    Abstract PDF
    In this study, on the basis of broad questionnaire about life insurance solicitors in Korea, we want not only to investigate whether or not exploratory variables such as belonging company channel, gender, age category, job career in the present company, satisfaction after job transfer, a number of interactions with insurance contractors, organization commitment, job satisfaction, channel management satisfaction affect the number of solicitor's policyholders and monthly new contract number of insurance which are insurance solicitor’s outcome variables but also to fit these outcome variables using negative binomial regression model. We use the number of solicitor's policyholders and monthly new contract number of insurance which stands for future growth to both insurance customers and insurance company as solicitor’s outcome in stead of solicitor’s income which has been used in the previous study. As the result of study, important factors influential in the number of solicitor's policyholders turn out to be channel management satisfaction,a number of interactions with insurance contractors, job career in the present company, satisfaction after job transfer in order. the number of solicitor's policyholders increases as satisfaction after job transfer increases or a number of interactions with insurance contractors increase. However, as channel management satisfaction decreases, the number of solicitor's policyholders increases. The factors influential in solicitor’s monthly new insurance contract numbers, followed by belonging company channel, gender, satisfaction after job transfer, organization commitment, channel management satisfaction, age category. Solicitor’s monthly new contract number of insurance increases as satisfaction after job transfer increases or job satisfaction increases. However as organization commitment decreases, Solicitor’s monthly contract number of insurance increases.
  • 3.

    A Structural Change in Korean National Pension for Efficient Multi-pillar Retirement Income Security System

    Wonshik Kim | 2012, 23(4) | pp.61~98 | number of Cited : 5
    Abstract PDF
    This paper suggests a structural reform of the Korean national pension system. Korean retirement income security system consists of national pension, legal corporate pension, and individual pension, which are self-financed, and basic aged pension and minimum life guarantee benefit of the aged, which are tax-financed. Even though these programs are substitutable for one another, they are individually-run, creating moral hazard problems in households' contribution to national pension. Therefore, there is a need for the establishment of an efficient system that provides optimal level of retirement income to households. I suggest a hybrid national pension system, where (i) national pension uses a defined benefit method in financing basic benefit, and a defined contribution method in income related benefit; (ii) basic benefit is income-tested while insuring basic aged pension and minimum life guarantee benefit of the aged, and; (iii) income related benefit are allowed to be contracted out from legal corporate pension. The policy change decreases the government's fiscal burden in case of depletion of national pension fund, and strengthens the capital market by making pension fund market more competitive.
  • 4.

    An Analysis on the Minimum Guarantee Reserves in Variable Annuities Using Different Stock Return Models

    김융희 , Kim, Changki | 2012, 23(4) | pp.99~131 | number of Cited : 8
    Abstract PDF
    This research studied the effects of stock return estimation model on the minimum guarantee reserves. Investigating KOSPI log return data since Jan 1990 and onwards, we were able to observe heteroscedasticity such as volatility clustering and leverage effects. To identify models which most clearly reflect these properties, we used GBM, GARCH(1,1)and EGARCH(1,1) models of which EGARCH(1,1) was found to be the optimal one. Under market incompleteness assumption, we used the conditional Esscher transform to find an appropriate risk neutral measure and the Monte-Carlo simulation method to compute the minimum guarantee reserves. Computation of the minimum guarantee reserves using GBM, GARCH(1,1) and EGARCH(1,1) models demonstrated that GBM and GARCH(1,1) models resulted in lower minimum guarantee reserves than when using EGARCH(1,1) model. In other words, we proved through this study that for sound computation of minimum guarantee reserves, one must thoroughly analyze the properties of returns of underlying assets in question prior to computation. Without such analysis, the computation may lead to underestimation of the minimum guarantee reserves.
  • 5.

    A Study of the Boundary Setting of Insurance Group-wide Supervision - Based on IAIS Insurance Core Principles -

    Min, Se-Jin , Kim Hunsoo | 2012, 23(4) | pp.133~169 | number of Cited : 5
    Abstract PDF
    The International Association of Insurance Supervisors(IAIS) notices,after the financial crisis of 2008, that the financial stability of a insurance company can be negatively affected if the company is related with non-insurance and/or non-traditional insurance activities via ownership. IAIS currently discusses methods to close the supervisory loopholes in group-wide supervision. All the methods start with defining the insurance group. In Korea, financial groups are not supervised except ‘financial holding company’ structures, which are legally defined in ‘Financial Holding Company Act’ of 2000. Since most of insurance companies are not under statutory financial holding company, there are insufficient group-wide supervision on the insurance companies in groups in Korea. The first step is defining the insurance group in the context of group-wide supervision, based on IAIS Insurance Core Principle(ICP). ICPs are principles, lack of details and country-specificities. This article studies ways to set boundaries of insurance groups in Korea to enhance financial stability, considering the legal and economic environment. We divide the group structures into ‘loose group structure’ and ‘holding company structure’, and further classify the holding company structure into ‘non-operation holding company form’, ‘operation holding company form’, and ‘foreign-based holding company form’ according to the characteristic of the holding company. Especially for loose group structres, in which most of the large insurance companies are included, we suggest standards and necessary conditions to form primary and secondary insurance groups.