Summary |
The current volume goes beyond the actuarial approach to encompass papers applying the insights and techniques of financial economics. The papers fall into two groups. The first group consists of papers that adopt an essentially actuarial or statistical approach to solvency modeling. These papers represent methodology advances over prior efforts at operational modeling of insurance companies. The emphasis is on cash flow analysis and many of the models incorporate investment income, inflation, taxation, and other economic variables. The papers in second group bring financial economics to bear on various aspects of solvency analysis. These papers discuss insurance applications of asset pricing models, capital structure theory, and the economic theory of agency.
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