Why Insurance Regulation Is Crucial for Long-Term Investment and Economic Growth

Abstract

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Investment Activity of Insurers and the State Economic Growth

“…At the same time, the influence of state regulation on the investment policy of insurers is taken into account. Thus , Focarelli, (2017), considering the role of insurers as providers of long-term investment in the economy, is talking about the importance of prudential regulation. He states that insurers, especially at long-term types of insurance, use financial instruments characterized by a high level of issuer quality and at the same time ensuring a sufficient level of profitability.…”

“…This is due to the need to fulfill liabilities, including those on profitability to holders of insurance policies, with a simultaneous guarantee of insurance payment. Insurers are interested in investing in segments where there is low volatility, predictable cash flows and low correlation with operations in financial markets (Focarelli, 2017;Palei et al, 2016). Gulnara Kaigorodova, Daria Alyakina, Guzel Pyrkova, Alfiya Mustafina and Viktor Trynchuk / Montenegrin Journal of Economics, Vol.…”

“…A very important thesis is formulated by D. Focarelli (2017). He says that even during economic recession, most insurers on long-term types of insurance continue to pay insurance premiums.…”

Property Risk Under Solvency Ii: Effects of Different Unsmoothing Techniques

“…Solvency II also allows the possibility of replacing predefined parameters with company risk parameters that are more appropriate for the firm's own risk profile (Butaci, Dzitac, Dzitac, & Bologa, 2017). One important factor of Solvency II is that it employs market values to assess the available capital, which could overstate the companies' balance sheet exposure to short-term market volatility, creating a disincentive for investment in illiquid, long-term, risky assets such as property (BlackRock, 2012;Hoering, 2013;Focarelli, 2017).…”

El desarrollo del sector asegurador y el crecimiento económico: un análisis empírico para 47 países

“…Países como España y Alemania son ejemplos claros de lo anterior, lo cual se puede observar en las Figuras 1 y 2, donde se muestra la evolución del volumen de primas y el PIB para estas dos economías desarrolladas. Debido a la importancia del mercado asegurador en una economía, diversas investigaciones han puesto de manifiesto la necesidad de más estudios que busquen analizar el vínculo entre el desarrollo del mercado asegurador y el crecimiento económico (al respecto, véase Haiss y Sumegi, 2008;Outreville, 2013;Focarelli, 2017). Lo anterior se debe a que en su mayoría la literatura empírica se basa en analizar únicamente el efecto del desarrollo de los seguros del segmento de vida -sin abarcar no vida-.…”