Methods to Fund Technical Reserves in General Insurances
Journal Title: Revista Romana de Statistica - Year 2012, Vol 60, Issue 2
Abstract
Currently, great emphasis is placed on the necessity to maintain financial stability of insurance companies. Nobody knows exactly when and if an ensured risk will occur, or what is the exact measure of compensations the insurer must pay. However, these unknown variables can be evaluated with the help of actuarials methods of founding technical reserves that allow insurance companies to make sure they hold financial reserves that are adequate to assumed responsibilities. In order to honor at any time the engagements resulted from insurance contracts, insurance companies are compelled to form and maintain certain technical reserves, the compensation reserve representing the greatest element of liabilities in their balance sheet. Subsequently, these technical reserves hold a major role in ensuring financial stability for insurance companies, their correct estimation being absolutely necessary. Also, the option of founding technical reserves has a vital importance for insurance companies, because funds related to them are invested, and the gains thus achieved represent a great source of income. In the case of general insurances, the compensation reserve is estimated on the basis of actuarial techniques, the most known of these being the Chain-Ladder method and the Bornhuetter-Ferguson method. The Bornhuetter-Ferguson method proved to be useful for certain general insurance classes. Especially, when data are highly unstable, a method such as the Chain-Ladder technique can lead to unsatisfactory results.
Authors and Affiliations
Dan ARMEANU, Ana-Maria BURCĂ, Sorin CIOACA
Keywords
Related Articles
- EP ID EP103673
- DOI -
- Views 166
- Downloads 0
Aspects Regarding Alternative Currencies
The occurrence and use of alternative currencies is manly related to the informal economy area, usually placed outside the economists preoccupation. Under the conditions of the current crisis, there is, however, a recon...
De la activităţi sportive legate de reciclare, la reciclarea deşeurilor din sport: o anchetă statistică şi modelul ei econometric pentru identificarea factorilor într-un proiect
Activităţile de colectare şi reciclare a deşeurilor prin caracterul lor de „masă” au fost îndreptăţit asimilate cu „sportul reciclării deşeurilor”, dar în contextul contemporan al complexităţii activităţilor şi economisi...
Comparative Study Concerning Liquidity in the Romanian Banking System
Periodically, there are raised discussions regarding a liquidity crisis following the possibility of massive cash withdrawal from Romania, operation that is likely to be initiated by foreign banks. The paper analyzes the...
Multiple Linear Regression Model Used in Economic Analyses
The multiple regression is a tool that offers the possibility to analyze the correlations between more than two variables, situation which account for most cases in macro-economic studies. The best known method of estima...
SMEs’ insolvency analysis in Romania in the year 2010. A microeconomic logistic approach
In this article we study the relationship between microeconomic factors (financial ratios) and SMEs’ insolvencies in Romania using logistic regression model to predict the likelihood of SMEs bankruptcy in the aftermath o...