2010, Vol.21, No.3

Journal of Insurance and Finance 2023 KCI Impact Factor : 0.59

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

This paper analyzes how first premiums in variable annuities and universal products respond to shocks to macroeconomic variables as well as each of their own variables. Then it decomposes the variance of their forecast errors caused by shocks given exogenously to the variables. Our end results in the paper are that following a temporary positive response, the first premiums in both variable annuities and universal continue to respond negatively to a shock to the interest rate, the so-called Korea's 5-year government bond yield, whereas they show a permanent positive response to the Korea Composite Stock Price Index (KOSPI). In addition, it follows that the first premiums in variable annuities shows a positive response to a shock to the unemployment rate, while those in variable universal does a negative response. The variance of forecast errors in variable annuities is greatly caused by a shock to the KOSPI and the interest rate. In contrast, the variance of forecast errors in variable universal is largely led to by a shock to the unemployment rate.

It is expected to reinforce the activity for preventing industrial accidents to evaluate employer's efforts to avert occupational diseases and to reflect it adequately in calculating the premium of workers' compensation insurance. It can also contribute to enhancing equity of the firms which participate in financing workers' compensation insurance. The purpose of this paper is to reduce those work-related accidents by comparing methods of calculating workers' compensation insurance premium in Korea and Germany and making some suggestions for reinforcing employers' efforts to prevent industrial accidents. This paper suggests that the balance rate in Experience Rating System should be based on the expenses related with new industrial accidents within the reference period.

There are secondary life insurance markets where a policyholder can sell her insurance policy to her insurance company or a third party. The paper focuses on the trade between a policyholder in the life insurance market and a third party who is an investor in the capital market. The trade is called a life settlement. Theoretically, life settlements are expected to raise the level of social welfare. In practice, it is shown that both policyholders and investors can earn more profits in life settlements than otherwise they could earn; as a result, life settlements have grown well in the U.S. There are two types of life settlements: viatical settlements for terminally ill insureds and senior settlements for impaired insureds who are 65years old or more. In the U.S., the latter is booming while the former has disappeared as its alternatives such as advanced death payments are provided by insurers. In the Korean insurance market, life settlements could be available with an insurer's consent. However, it is not guaranteed that Korean life settlements can grow well even though they are legally possible. It is because the economic availability of life settlements depend on the level of mortality of the insured. The paper tests the economic viability of life settlements in Korean insurance market. Based on whole life critical illness insurance data and national statistics on cancer, our cash flow simulation results indicate that only viatical settlements can be viable in some cases while senior settlements are not in Korean insurance market. Given that Korean life insurers are also providing alternatives to life settlements which has smothered viatical settlements in the U.S., our results suggest that life settlements are not expected to grow well in Korea.