JOURNALS

Journal of Insurance Research and Practice

Volume 18 part 1 (January 2003)

List of issues | Journals home page

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The calculation of damages for personal injury in respect of loss of future earnings
By Richard Lewis, Robert McNabb and Victoria Wass

Abstract

This article examines the effect upon damages for personal injury in this country of methods used in the USA to calculate loss of future earnings. The work of lawyers is examined from the perspective of labour economists. The damages calculated by using these alternative methods are compared with those actually awarded in over a hundred cases determined by courts in England and Wales. This interdisciplinary, empirical and comparative study reveals that the tort system fails to satisfy one of its main objectives in that it does not provide recipients of damages with “full” compensation. Instead claimants are often under-compensated by the present methods used to assess loss of future earnings.

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“Essential, important or incidental”: a stakeholder analysis of perceptions towards professional insurance qualifications in general insurance
By Andrew Gadsby

Abstract

This article considers what perceptions are held towards professional insurance qualifications in general insurance by a variety of stakeholders and identifies the factors and constraints that influence those perceptions

This is within a business environment that was found to be one of organisational change in insurance and diminishing consumer confidence.

The article concludes that professional insurance qualifications are perceived as important rather than essential but that the nature of emphasis toward them by the companies studied is very different, according to historical, cultural and strategic factors.

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Functional insurance company risk classification
By Stanley Mutenga and Elias Dinenis

Abstract

The main reason for carrying out this study is underpinned by a barrage of criticism labelled against the insurance industry for their sloppy management of risk capital and the shortcomings of deficit underwriting accounts. Inefficiencies in capital management are a result of excessive accumulation of relative capital against all the risks defining the loss distribution. Insurance companies accumulate capital relative to risks they face in their portfolios, in order to satisfy regulatory and rating agents' solvency requirements. Risk classification by the insurance industry and regulators based on the classes of business underwritten fail to take into consideration financial attributes of each liability account. The classification proposed in this study recognises duration and convexity risks defining each liability account and matching them to assets with similar duration. The model developed in engineering risks arising from various transactions entered into by the company and operational risks that are decision making based risks. This classification redefines insurance cash flows from a class based disintegrated system, to a functional financial approach that recognises the uniqueness of insurance cash flows and the risks underlying every transaction that endeavour to generate net positive cash flows. This approach helps us not to be viewed as deficit accounts, and how they can be integrated with the investment accounts through transfer pricing systems into profit centres. We believe the reclassification of insurance risk is the only way forward in combating the underperformance of the insurance industry against major financial indices and other financial institutions and thus we recommend it to you.

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Insurance claims handlers' reactions under conditions of uncertainty
By Brian Greenford

Abstract

Plaintiffs, who have suffered personal injury will be compensated, on the whole, by insurers. In the common law the procedure by which compensation takes place is fraught with uncertainties. There is doubt as to liability as this is based on the evidence submitted by witnesses to an accident. In court the evidence of some witnesses may be rejected and thus either the plaintiff or defendant's case destroyed. Similarly there is uncertainty as to the extent of an injury as well as the amount of damages that may be awarded. The uncertainty regarding quantum is higher in Ireland than in England. This is due to the use of a book of damages in England which does not exist in Ireland. These uncertainties raise the question as to how insurance claims' clerks in these two countries deal with uncertainty. In order to test this three vignettes were formulated and sent to claims handlers in both countries. These vignettes tested their reaction to uncertainty in both the merits of the case and quantum. The results of the vignettes reveal that both sets of claims handlers react to uncertainty in a similar fashion. They are both risk averse and both are pressurised to settle claims quickly.

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An examination of the Nigerian public service pension system
By Olaniyi S Onifade

Abstract

In recent times, pension scheme management has become a topical issue around the world. This is not unconnected with the growing concern over the ability of governments (and employers) to meet future pension liabilities. Although, each country is faced with its peculiar pension problems, statistics have shown that life expectancy is increasing globally and this will continue to be so for quite sometime, if not indefinitely. As people continue to live longer, pension liabilities also increase – hence the need for better scheme management.

With the mounting anxiety about old age financial provision, countries are now devising various kinds of pension reforms to ensure that the promised benefits are provided when they become due for payment.

This article examines the public service pension system in Nigeria. It starts by identifying the importance of a pension scheme and thereafter looks at how they are managed around the world. The article further reviews some special attributes of the public service that have led to certain variations of the pension schemes for this sector.

Piqued by the pathetic state of the Nigerian public service retirees, the article takes an in-depth look at the management of the scheme and identifies its key features. Although, the country has no immunity against the global problem of longevity as it affects pension provision, the article identifies a number of other key problems militating against the effective performance of the public service pension system in the country.

It concludes that despite the prevailing problems and the alarming financial situation of the retirees, hope is not lost. It therefore ends with a number of recommendations that could be adopted to ensure a brighter future for both the present and future retirees from the Nigerian public service sector.

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Satellite pre-launch insurance: technological advances reduce risk for underwriters, discuss
By Donna Young

Abstract

The subject of my dissertation is satellite pre-launch insurance. I will be discussing the argument that technological advances in the satellite industry have reduced risk to pre-launch insurers. The title is set out as a statement “Satellite Pre-Launch Insurance: Technological advances reduce risk for underwriters”. There is an opportunity to question this assumption by the final word in the title, “Discuss”. This presentation was deliberate. When I began my research, although I had a notion of whether the statement was valid, I did not have the evidence to either substantiate or refute it. As the theme develops I will first explore the arguments and facts that support the statement and then investigate those that challenge it. This discussion will be split into two sections within the main text. I will then conclude the debate.

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