The insurance industry is a very important component within the advanced society where it plays a pivotal role in assuring the protection and transferring of wealth, properties, and its main function is to minimize risks for individuals, families, and private and public institutions, and a critical link to other economic institutions that helps to promote and stabilize the entire financial system. Insurance can be defined as an intricate product that obliged to indemnify the insured, an individual or an entity, according to specified terms and conditions commensurate to the occurrence of unanticipated events (i.e., accident, natural disaster etc..) (Cummins & Doherty, 2006). The process of the exchanged transactions between parties is arranged …show more content…
The industry is an active contributor to the capital market as well. In 2014, the industry raised 8 billion dollars in equity capital, sold over 37 billion dollars of new debts, and a total of 14 billion dollars in new merger and acquisition deals, a 79 percent increased from 2013. (Department of Treasury, 2015). According to past studies, from 1960s to 1980s, there is a direct correlation between a country growth, as measured by its Gross National Product, and the acceleration in the financial sector development as increased in total assets and premiums written (Haiss & Sumegi,
RBC first established its insurance platform in the early 1980s where it promoted creditor and basic travel insurance, as those were the few products that can be promoted by bank employees under Canada’s Bank Act. Through the acquisitions of various insurance companies, they eventually entered the life, health, property and casualty insurance markets; demonstrating significant growth in the industry and eventually being level in the playing field among other large insurance competitors (McLaren, Babin, & Schuster).
Allstate insurance is the second largest property and casualty insurance company by premiums in the United States. Allstate insurance handles about 12% of the U.S home and auto insurance market. (Allstate, 2014). Many of Allstate’s customers fall under what one could refer to as a traditional selection of insurance for automobiles. Recently, Allstate has noticed a major shortcoming in lifestyle insurance, which includes coverage for motorcycles, boats, and other recreational vehicles, in comparison to its competitors. The motorcycle insurance sector is a 10.4 billion dollar industry and growing (PRWEB, 2012). The U.S. Department of Transportation website reports some astounding figures, including that 5,370,035 motorcycles were registered three years before the article, 7,138,476 motorcycles registered at the time of the article, and grew to 9,477,243 registered motorcycles at the end of 2012 (NHTSA, 2013). It is obvious as to why Allstate would identify motorcycle insurance as a worthy lifestyle product to devote marketing research dollars into in order to develop new strategies for cornering a share of the market.
The fact that majority of the capital funds was in the form of portfolio capital instead of foreign direct investment (FDI) had also worsen the situation. The ratio of portfolio capital to FDI had increased substantially from 1:1.3 in 1990 to 1:6.5 in 1993. Given the volatile nature, portfolio capital tends to respond with greater speed to changes in the environment.
During the economic growth that erupted during the World War II era, Congress passed the Revenue Act of 1942 as a direct attempt to combat excessive wartime profiteering by companies. In “One Nation, Uninsured”, Jill Quadagno revealed that an unexpected side effect of this law swiftly arose when employers decided to provide health benefits to their workers as a way to reduce paying the mandated government taxes on excess profits. By providing these benefits, many companies in the industrial sector were able to recruit new workers who were willing to accept slightly reduced wages in exchange for receiving tax-deductible benefit plans, along with satisfy the demands by trade unions to include fringe benefits in employment contracts. The symbiotic relationship that resulted when employers took on the burden of purchasing health insurance plans for their employees became the foundation for the American employer-based health insurance system which is still being used today.
In America, the number of uninsured rises every year and no solution to the problem has
Rousmaniere, Peter. “Facing a tough situation.” Risk & Insurance 17.7 (June 2006): 24-25. Expanded Academic ASAP. Web. 23 March 2011.
U.S. financial markets assume a vital part in helping the wellbeing and productivity of the economy, businesses, and individuals. There is a solid relationship between the soundness of the economy and budgetary business improvement and monetary development, resulting in the slightest change in financial markets greatly affecting the economy, businesses, and individuals. Financial markets influences the increase in capital, removes the risk of subsidiaries, and liquidity in currency markets. When the monetary markets are doing admirably, "firm-level, industry-level, and cross country considers all propose that the level of money related advancement applies an expansive, positive effect on financial development." (MIT, 2001)
This paper will serve as a discussion on the topic of investment banking. In this paper the author includes various articles and thoughts that help to understand the background and principle of investment banking. This discourse will attempt to address this issue through explaining what investment banking is, introducing major investment bankers, and how investment banking affects our globally economy. Investment Banking Defined Investopedia (2008) stated this definition about investment banking, “A specific division of banking related to the creation of capital for other companies. Investment banks underwrite new debt and equity securities for all types of corporations.
For the contrary the loading change (fee to cover the incurred administrative expenses) can be expensive. Also, the insurance sometime fails to meet demand providing limited protection, this insurance shortage can lead to ineffective insurance regulations. As well as, for consumer with minimum loss experience, their premium will be high, because their probability of loss is high.
After hours of independently researching the field of Actuarial Science, I contacted Mr. Michael Miller. Mr. Miller is the Director of Insurance Pricing at Catlin Inc., a private insurance company in Atlanta, Georgia. With a Masters of Science in Mathematics and classification as a Fellow of Casualty Actuarial Society, Mr. Miller has thrived in the field of Actuarial Science for twenty years. He has even achieved the position of President of the Casualty Actuarial Society of the Southeast.
The US healthcare system is focused on a mixed insurance system with both private and public insurance institution. The health insurance system also relies heavily on employment. It depends heavily on corporations and employees to be key sponsors for insurance. This has led to many companies going bust as they are unable to sustain the amount of funds required just to keep their employee’s insurance policies going. Insurance has become so profitable that there are more than a thousand private companies that want to share this very profitable business. These companies are also not regulated on a country level. The profit-targeting companies have also come up with many overlapping and unnecessary policies to fully utilize the loophole in the American healthcare system. These are all in addition to the public insurance policies such as Medicare: covers elders, disable and end stage renal diseases, and Medicaid: children, war veterans and self-employees. As of 2015, 15% of the population is without insurance; one of the major reason is due to the people not having sufficient knowledge on their eligibility.
If the development of Financial Market in America is like a sturdy adult, I would say the development of Financial Market in China is just like a child. The history of the U.S. financial market was established and has been growing over two centuries. For China, only twenty year has now passed since the financial market was built and growth. The Chinese financial market seems to be immature compared to the U.S. For example, China’s financial market does not have a thorough monitored stock market. The child is just starting to imitate the behavior and follow the step of the adult. However, the child is too young that mistakes always being made. On the other hand, since the child is in his early growth stage, a high level of growth is undertaking and a large progress might be attained. In today's China’s financial market, it is necessary for China to gather finance professionals in development of financial market. As a recent graduate student, working in the finance field less than a year, it is extremely hard for me in making a tiny positive effect on the growth of Chinese financial. However, to be engaged myself to the development of Chinese financial market is my long-term career goal.
Financial Future: Where Will it be in 10 Years? Retrieved on November 20, 2013 from
For an organisation to rise fund, they usually tend to look at the stock market and capital market to do it so. This is two markets are usually seemed similar by the investors as they both contributes to the development of an economy. But there are significant difference between them. The capital market is a market that consist of stock market as well as the bond market. As a result, the capital market provides a long-standing finance using the debt capital and the equity capital. Capital markets divided into two sectors known as primary markets and secondary markets. The primary market is where securities are issued for the first time whereas the secondary market is where securities that have been already issued are traded among investors (Difference...
It is a known fact that the banking industry plays a huge role in today’s society, the industry has grown rapidly of many decades and still growing. The banking sector is that sector of the society that is actually responsible for the handling of financial assets for other sector of the economy, they do this by investing the financial assets in order to create more wealth in the society while regulating all the activities involved in the process. (What is the banking Sector 2015)