2007, Vol.18, No.1

Journal of Insurance and Finance 2023 KCI Impact Factor : 0.59

pISSN : 2384-3209
https://journal.kci.go.kr/kiri

This study applies DEA and Malmquist Index to investigate impact of bancassurance on the cost efficiency and productivity changes of the Korean life insurance industry. Complementary measures, including profile analysis, nonprarametric analysis, and regression analysis, are conducted for 18 life insurance companies for the period of 2000-2005. The results show that bancassurance does not have a significant impact on the cost efficiency in spite of its positive influence on the productivity. This implies that bancassurance can neither decrease life insurers' cost nor increase consumers welfare to achieve its primary objective. This study also suggests that the efficiency of bancassurance may be restricted by the rigid regulation as well as the check and balance between banks and life insurance companies.

We measured the disposal income elasticity of the personal pension savings(hereafter, PPS) and analyzed its deduction effect. As a result, we found that the disposal income elasticity of the PPS was 0.404 during 1994-1997, 0.153 in 1998, and 0.31 in 2001, and the benefits of the PPS deduction were relatively beneficial to the high-income brackets. Although the PPS deduction was introduced to encourage a voluntary income security for the old-age, our empirical results imply that the PPS deduction does not function as an incentive for the low-income brackets. Thus, new alternatives are needed to introduce and implement so as to help the low-income earners prepare for sufficient income to expend during the old-age.

This paper focuses on finding Maximum Guarantee Limit of Construction Bond using Monte Carlo Simulation and VaR(Value at Risk) methodologies. VaR is an efficient risk management method to measure the largest loss expected in the financial industry where risk factors significantly influence the values of portfolios. Through the empirical analysis using 10 accident year data of Construction Bond Insurance we show the current solvency regulation of Construction Bond insurance is not adequate to sustain insurer's financial strength because of its sensitivity to economic condition and chain reaction. Therefore, the Financial Supervisor Authority needs to consider new regulation reflecting the characteristics of Construction Bond Insurance such as the Maximum Guarantee Limit which limits maximum amount of liability to a couple of times its economic capital.