External Envionment Flashcards
Importance of climate change to insurers
Monitoring emerging changes/impacts
Direct impact on claims
New opportunities
Change to market for insurance
Need to update policy wording/exclusions
May impact availability of reinsurance
Regulatory changes/requirements
List some economic factors
expectation of profits
real interest rates
inflation
risk premium
real economic growth
currency
Compare and contrast bettwen Mutual funds and listed companies
mutual:
set up to address welfare of a defined group
only starts for altruistic reasons
capital is borrowed and repaid as profits emerge
no shareholders
all future profits belong to policyholders
capital intensive products are harder to launch
listed company:
capital raised on financial markets
shareholders may receive dividends from profits
benefits for a mutual should be better than a listed company
Define corporate governance and essentially ‘good corporate governance’
name given to high-level framework
within which managerial decisions are made within a company
good corporate governance ensures that the company is managed efficiently
in a way that meets the requirements of all of its stakeholders
a particular concern of corporate governance is that managers might make decisiosn based more on their own personal interests
rather than on the interests of the shareholders
outline actions that the company can take to ensure good corporate governance
establishment of clear corporate aims and objectives
(setting of realistic short- and long-term company targets)
(to meet the expectations of the key stakeholders)
the production of regular internal management reports
(compare actual performance with the company’s aims, objectives and targets)
establishment of clear operating procedures for all critical processes
(a system that checks such procedures are being implemented)
establishment of an audit committee and clear audit trails
appointment of non-executive directors to provide a more impartial view
regular publishing of auudited accounts
development and recording of job descriptions for management
establishment of effective performance measurement practices
implementation of remuneration schemes
having a clear management framework
