Risk Management Response of the Insurance Companies to the Financial Crisis

Dopady finanční krize na řízení rizik pojišťoven

Štěpán Onder

Český finanční a účetní časopis, 2010, vol. 2010, issue 3, 29-48

Abstract: Financial crisis has shown significant gaps in risk management system in financial institutions. The major critics focused on an inappropriate usage of the innovative financial products with not adequate reflection of capital requirements for their market risks, not adequate valuations of those products with reliance on external valuation by rating agencies, not transparent settlement via OTC and not adequate collateral management combined with the extreme financial leverage in those positions and unduly concentrations on the dozen counterparties. The proposed changes in regulatory regimes address major gaps in risk management system like the more stringent guidelines for liquidity risk management, the general increase of capital requirements and capital transparency on credit derivatives, securitization, etc. plus the abolishment of hybrid capital and the convertible capital from Tier 1 core capital; the more stringent requirements on risk models combined with the stress testing requirements to cover the extreme market events.

Keywords: Financial crisis; Risk management; Insurance company; Solvency II; Basel III; Liquidity risk; Stress testing; Financial leverage; ERM; Integrated risk management; Economic capital; Pro-cyclicality; Own funds; Remuneration; Finanční krize; Finanční páka; Integrované řízení rizik; Pojišťovna; Řízení rizik; Riziko likvidity; Stresové testování (search for similar items in EconPapers)
JEL-codes: G01 G22 G32 G39 (search for similar items in EconPapers)
Date: 2010
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DOI: 10.18267/j.cfuc.74

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