经济分析-保险业Aig.pptVIP

American International Group An Economic Analysis of the Insurance Industry using AIG as a Case Study Agenda Industry Analysis Firm Analysis Forecasts, Projections, Recommendations Economic Environment Macro Impact on Firm Industry Industry Analysis Economy The Markets for Insurance Managing Risk: Life is Full of Gambles Managing Risks… Individuals/corporations can reduce risk by choosing any of the following: Diversify Accept a lower return on their investments Buy Insurance The Markets for Insurance One way to deal with risk is to buy insurance. The general feature of insurance contracts is that a person facing a risk pays a fee to an insurance company, which in return agrees to accept all or part of the risk. Risk vs. Return Principle #1: Tradeoffs Amount of “coverage” vs. the (perceived) probability of loss… High Risk Aversion will drive higher coverage… And hence higher insurance premiums! Role of Insurance Industry in the Economy NOT to eliminate Risk, BUT To spread it around more efficiently Example: Fire Insurance Owning fire insurance does not REDUCE the risk of losing your home in fire In case of the unlucky event, the insurance company compensates you for the loss Risk is spread between all the shareholders.. (e.g. 10,000) Easy to bear 1/10,000th of risk Problems in Spreading Risk Adverse Selection A high risk person/corporation is more likely to apply for insurance than a low-risk person Health Insurance – healthy people don’t buy group insurance… Moral Hazard People have less incentive to be careful about their risky behavior Fire Extinguishers to get the discount, failure to maintain Come on… this is real reason why Insurance is NEEDED! Insurance Categories… Property Casualty Auto, Home etc. Catastrophes Life Annuities, Disability Health – Medical, Dental, Vision Worker’s Comp. Unemployment Disability Specialty Medical Malpractice Product/Professional Liability Fraud Babe Ruth: Specialty Coverage Sickness Policy Industry Size Insurance Indu