Product risk is important to firms' enterprise risk management. This dissertation focuses on product risk in the U.S. life insurance and health insurance industries. In particular, we add new dimensions to the measurement of product risk for these industries, and we explore how these industries manage product risk in a context of other enterprise risks. In this dissertation, we identify new product risks, propose new measures, and study the management of these risks. In the life insurance industry, we identify a new type of product risk, the guarantee risk, caused by variable annuities with guaranteed living benefits (VAGLB). We propose a value-at-risk type measure inspired by the risk-based capital C3 Phase II to quantify the guarantee risk. In the health insurance industry, where the degree of uncertainty varies for different types of health insurance policies, we develop four exposure-based risk measures to capture health insurers' product risks. Then we study how life and health insurers manage product risks (and asset risks) by using capital in the context of other risks and appropriate controls. We add to the literature in the life insurance industry by examining the relationship between capital and risks when the guarantee risk is accounted for. In the health insurance industry, to our knowledge, no similar research on the relationship between capital and risks has been conducted. In view of the current topicality of health insurance, our research therefore adds a timely contribution to the understanding of health insurer risk management in an era of health care reform. Capital structure theories, transaction cost economics, and insurers' risk-taking behaviors provide the theoretical foundation for our research. As to methodology, we implement standard capital structure models for the life and health insurance industries using data from the National Association of Insurance Commissioners (NAIC) annual filings of life/health insurers and health insurers. Simultaneous equations modeling is used to model life and health insurers' enterprise risk management. And the estimation is conducted by the generalized estimation equations (GEE). We find that both U.S. life/health insurers and health insurers prudently build up capital as they experience more product risk and asset risk controlling for the other enterprise risks. We also find that life/health insurers may be using derivatives as a partial substitute for capital when managing new product risk caused by VAGLB, the guarantee risk.

Major challenges for life insurance companies have been posed by an unprecedented wave of mergers and acquisitions in the insurance industry and the emergence of non-traditional competitors such as banks, mutual fund companies and investment advisory firms. This is the first book to analyze the determinants of firm performance in the life insurance industry by identifying the `best practices' employed by leading insurers to succeed in this dynamic business environment. The book draws upon data from insurer financial statements as well as upon an extensive survey of life insurer management practices and strategic choices in distribution systems, information technology, mergers and acquisitions, human resources and financial strategies. Generic strategies such as cost leadership, customer focus, and product differentiation are analyzed as well as strategic practices specific to the insurance industry. Best practices are identified by measuring the economic efficiency of insurers and by comparing firms across the industry. Both cost and revenue efficiency are measured relative to best practice efficient frontiers consisting of the industry's dominant life insurance firms. Economies of scale and the effects of mergers and acquisitions on efficiency are also analyzed. Financial strategies are examined with specific reference to pricing policy, valuation of assets and liabilities, and the current state of firm-level risk management systems. The benchmarks established are the result of extensive fieldwork that identifies key financial risks and methodologies to both measure and manage them at the firm level. The results discussed in the book indicate that firm performance is significantly correlated with management practices and strategic choices. Thus, life insurers can improve profitability by adopting optimal combinations of strategies. The book contains important new material on the effects of strategic choices in product distribution systems, information technology, mergers and acquisitions, human resources, and financial risk management policies. In the area of efficiency, the methodology provides a new approach for identifying peer groups of insurers and measuring the performance of individual insurers relative to their peer group. On the topics of risk and pricing, new insights are offered relative to current methodologies and in regard to areas where improvement is clearly warranted. The book concludes with an analysis of the future opportunities and challenges in the life insurance industry facing managers, and the strategic options available to them to cope with these changes.

Explains the management issues surrounding enterprise risk management, capital, product development, and product design for life insurance and annuities.

Despite the importance of insurance in enabling individual and collective social, economic, and financial activities, discussions about the macroeconomic role and risks of insurance markets are surprisingly limited. This book brings together academics, regulators, and industry experts to provide a multifaceted array of research and perspectives on insurance, its role and functioning, and the potential systemic risk it could create. The first part discusses the macroeconomic role of insurance and how insurance is different from banking and general finance. Understanding the differences between the balance sheets of insurers and other financial intermediaries is essential for understanding the potential differences in risk nature and optimal regulation. The second part of the book focuses on the risks managed by the insurance sector and the potential for systemic risk. The chapters discuss the risks both on the asset and liability sides of insurers' balance sheets. The third part of the book covers the impact of regulation on insurance companies. Existing regulation is often complex and has a large impact on insurance companies' decision-making and functioning. The chapters also illustrate the unintended consequences of various forms of regulation. The book concludes with a summary of a survey that has been conducted in collaboration with McKinsey, where insurance executives have been asked about the risks and regulation in the insurance sector. The survey provides guidance for future research on insurance markets.

Covers the business of insurance and risk management, and is a tool for market research, strategic planning, competetive intelligence or employment searches. This book contains trends, statistical tables and an industry glossary. It also provides profiles of more than 300 of the world's leading insurance companies.

This carefully-researched book (which includes a database of leading companies on CD-ROM) is a complete insurance market research and business intelligence tool-- everything you need to know about the business of insurance and risk management.

The purpose of this new edition is to offer an updated view of the risk management field as it applies to medical products. Since the publication of the first edition (2012), the emphasis on risk-based processes has growth exponentially across all sectors, and risk management is now considered as significant as quality management. ISO 9001 was revised and now requires that top management promote the use of risk-based thinking. ISO 13485:2016, which specifies the requirements for a quality management system specific to the medical devices industry, also now shows a greater emphasis on risk management and risk-based decision making. In addition, the FDA Food Safety Modernization Act (FSMA) is the most important reform of U.S. food safety laws in more than 70 years. This indispensable book presents a systematic and comprehensive approach to quality risk management. It will assist medical and food product manufacturers with the integration of a risk management system or risk management principles and activities into their existing quality management system by providing practical explanations and examples. The appropriate use of quality risk management can facilitate compliance with regulatory requirements such as good manufacturing practice or good laboratory practice. All chapters have been updated and revised, and a new chapter has been added to discuss some of the most common pitfalls and misunderstandings regarding risk management, specifically those related to the use of FMEA as the only element of risk management programs. One of the appendices includes 12 case studies, and the companion CD-ROM contains dozens of U.S. FDA and European guidance documents as well as international harmonization documents (ICH and GHTF-IMDRF) related to risk management activities, as well as a 30-question exam (with answers) on the material discussed in the book.