Peacock Scholarship

 

The Effects of the Great Recession and the Implications on the Insurance Market Public Deposited

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My thesis investigated the life insurance industry prior to the financial crisis, as well as the vulnerabilities of the industry post-crisis. My studies have collectively affirmed that significant risks still remain and may pose detrimental effects to life insurers, perhaps forcing them to face insolvency if these risks occur together. Vulnerabilities, such as longevity risk, the interest rate environment, guarantees, and regulatory shortfalls, during the post-criss period have been largely overlooked. With lifespans increasing and interest rates remaining at unprecedented low levels, the life insurance market is exceptionally vulnerable and must be carefully evaluated with respect to its susceptibilities and investment approaches. As life insurance companies assume more risk, their derisking strategies, such as the use of reinsurance captives, are also associated with risks that are not well understood. Further research is necessary to analyze the performances of life insurers that are greatly intertwined with the banking industry and have heavily invested in securitization products.

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  • 10/14/2020
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