Credit Risk:
Credit risk involves the possibility of borrowers, bond issuers or other counter-parties defaulting in transactions. In class we learned about various ways to estimate default probabilities, including historical data, CDS spreads, bond prices or asset swaps or Merton’s model.
Sun Life has established a wide range of risk management controls to manage credit risks. Income and regulatory capital sensitivities are monitored, controlled and reported against their pre-established risk limits. Due to the nature of insurance products, investment diversification is needed to match their various liabilities. Investment limits are defined at Sun Life, which include asset class, geography and industry limits. Use of credit quality ratings
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The transactions introduce some risks of financial loss due to the failure in achieving the expected financial or strategic objectives. The financial or strategic benefits may not be realized due to competitions, regulatory requirements or other factors. One business risk involves effectively integrating the transferred businesses. Also, restructuring or reorganization of the businesses after transactions have been closed can be risky too. In terms of operational risks, integrating operations, especially the differences in organizational culture, can be a problem and may require significant management resources. Management’s attention from day-to-day businesses can be distracted. Thus, those synergies may not be realized if integration is not successful. Nevertheless, Sun Life tries to mitigate the risks associated with the integration of businesses by establishing procedures to oversee the execution and integration of M&A transactions. On the other hand, there could be potential market risks associated with the acquisition, as the investment returns depend heavily on market conditions. In particular, Sun Life is entering the emerging markets, which could be a bit risky even though they provide higher returns and growth opportunities. Some possible risks associated with emerging markets include lack of liquidity, political risks, foreign exchange rate risks, …show more content…
With the well-established risk management framework, we believe that Sun Life is able to tackle those risks to the best of its ability and minimize potential
Conquests--- the art of obtaining power and authority through means of military forces--- have been adopted and practiced throughout the history of America for centuries. Similar to how two art paintings have resemblances and differences when replicated by different artists, the conquests of Sundiata and Cortés both share commonalities as well as a fair share of respective distinctions. In Djibril Tamsir Niane’s Sundiata: Epic of Old Mali and Bernal Díaz’s The Conquest of New Spain, the narrator’s arguments within each account display a ray of more similarities in regards to the conquests’ successes of Sundiata and Cortés compared to that of their differences.
In our days mergers and acquisitions are a predominant feature of the international business system as companies attempt to exploit new market opportunities and to strengthen their market positions. Each year sets a new record for the total value of mergers and acquisitions and nearly every day new announcements are made in the business newspapers.
In order to be able to find and assess opportunities, risks and profitability in the early stages of acquisition, we conduct extensive analysis of the scope of business operations。
Insurance is a very important part of modern life and business. In this paper I will discuss the basic concepts of insurance, claims-made and occurrence liability policies, factors for selecting an insurance company and policies, and the difference between workers compensation and liability insurance.
Sundiata is an epic of a powerful king who expanded the Mali empire to a great territorial area and he did so because he was destined. My mother read me a more simplified story of Sundiata as a child and through reading this book, I remembered so many lessons and African cultural traditions that I learned as a child. There were several interesting aspects of this epic that reflected some of the material we have learned thus far in class as well as other interesting themes that are repeated throughout it. Sundiata is an epic that recounts a historical event while teaching various African ideologies.
Rousmaniere, Peter. “Facing a tough situation.” Risk & Insurance 17.7 (June 2006): 24-25. Expanded Academic ASAP. Web. 23 March 2011.
Acharya, V., Biggs, J., Richardson, M., & Ryan, S. (2009). On the financial regulation of insurance companies. Retrieved from http://www-vs.stern.nyu.edu/cons/groups/content/documents/document/con_030706.pdf
Mergers and acquisitions (“M&A”) refer to the consolidation of two companies and occur for a number of reasons, including growth, synergy, market power, sustainable competitive advantage, and diversification. M&As enable organizations to share resources, leverage competencies, gain flexibility and create opportunities that the organization may not otherwise have been able to create. An increase of international mergers and acquisitions seen over the last few years can be attributed to advances in technology, globalization and deregulation. Globalization and increased competition have resulted in organizations expanding their operations to foreign markets (Antila & Kakkonen, 2008). While M&As are widely utilized, many are not successful.
...t have merged together, the fixed costs are distributed over a large volume of production causing the unit cost of production of the firms to decline to big levels (Ghose, 2003: 29 paragraph: 4). After the firms have engaged themselves with merging and acquisition due to globalization there are other benefits that may arise. These include production facilities, management functions and management resources and systems. A foreign company can bring these benefits to the firm that it has acquired or merged with. There is also another important benefit that may arise that when global firms merge or are involved in the process of acquisition, there will be diversification of risks. When there are unfavorable conditions in one country affecting the market, the other country can have very favorable conditions and there will be no pure loss (Carr, 1999: 417 paragraph: 2).
Mergers and acquisitions immediately impact organizations with changes of rights, and ideas and eventually, in practice. There are multiple reasons some are motives and financial forces just to name a few. There are financial risks of merging with or acquiring an organization this is why you must have a strategic plan in place in order to benefit.
When entrepreneurs plan their business future they will consider how they can increase their business size or profit in a short period. Entrepreneurs may consider growing their business or company by using a merger or an acquisition. These methods can be a speed up tool and a short cut to enlarge their business. (Burns, 2011) Also they can reduce competition, make it easier for entrepreneurs to think about the market and product development and risk reduction. Furthermore, some lesser – known companies can improve their firm’s image and market power by using merger and acquisition with larger firms. However, there may be risks associated with merger and acquisition related to lack of finance and time. (Burns, 2011) This essay will discuss more deeply the advantages and disadvantages of using mergers and acquisitions, showing how it can affect firms and market with the case study.
The theory surrounding the fundamental principles of insurance, namely indemnity insurance, materiality, duty to disclose and insurable interest will be discussed. Thereafter, the above for mentioned concepts will be applied to the report at hand. Additionally, the outcome of Lorcom Thirteen (Pty) Ltd v Zurich Insurance Company South Africa 2013 case 54/08 [the Lorcom case] as well as Manderson t/a Hillcrest Electrical v Standard General Insurance Co Ltd 1996 (3) SA 434 (D) [the Manderson case] will be used to support the argument. Finally, the financial director will be advised as to the appropriate set of policies for the holding company regarding the subsidiaries.
Insurance company is an investment company that plans on making profits and avoiding losses. In this case of a contract the company takes a risk that may lead to great losses. For this reason, the insurance company requires to make great risk analysis of the same contract to minimize the risk it undertakes in the contract. It also requires analyzing investments in the industry and thus taking the best investment that maximizes the returns of the premium paid by the insurance holder.
J. David Cummins, A. S. (1999). Changes in the Life Insurance Industry: Efficiency, Technology and Risk Management: Efficiency, Technology, and Risk Management. Springer.
The company recognizes that it is subject to both market and industry risks. We believe our risks are as follows, and we are addressing each as indicated.