Assessing risk and financial strength of general insurers in Malaysia
Risk creates an economic burden for society by compelling the creation of reserve funds, raising the cost of certain services and excluding the provision of some goods and services. Because of the threat of failure and insolvency, the risk of insurance company is closely monitored by managers and...
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Penerbit ukm
2007
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| Online Access: | http://journalarticle.ukm.my/1835/ http://journalarticle.ukm.my/1835/ |
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ukm-1835 |
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eprints |
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ukm-18352011-06-15T03:03:51Z http://journalarticle.ukm.my/1835/ Assessing risk and financial strength of general insurers in Malaysia Saiful Hafizah Jaaman, Noriszura Ismail, Noriza Majid, Risk creates an economic burden for society by compelling the creation of reserve funds, raising the cost of certain services and excluding the provision of some goods and services. Because of the threat of failure and insolvency, the risk of insurance company is closely monitored by managers and regulators. Ever since the 1997 financial crisis that lead to the liberalisation in the insurance industry, monitoring insurers that are in or heading a hazardous condition has created a challenge to the regulatory bodies. Failure on the part of an insurer to give due performance of its obligations can lead to the policyholders losing part of the premiums paid or worse they or the third party may be deprived of any compensation due when claims are made. Capital, also called surplus or equity, is the excess of assets over liabilities. Technical insolvency occurs when obligations exceed assets requiring intervention by the regulators. Solvency of an insurer is intimately linked to the condition of its financial statement. Risk-based capital (RBC) is the theoretical amount of capital needed to absorb the risks of conducting a business. For insurance, it is the amount of capital necessary to assure major parties to insurer insolvency that the danger of failure is acceptably low. Generally, RBC categorises risk into different components to cover the liquidity, asset management and leverage aspects of an insurer. In this study, the risk-based capital is attempted to assess the risk and financial strength of twenty general insurers in Malaysia from the years 2002 to 2004. Our study found that based on RBC about a fifth of the insurers need regulatory intervention Penerbit ukm 2007-07 Article PeerReviewed Saiful Hafizah Jaaman, and Noriszura Ismail, and Noriza Majid, (2007) Assessing risk and financial strength of general insurers in Malaysia. Journal of Quality Measurement and Analysis, 3 (1). pp. 65-73. ISSN 1823-5670 http://www.ukm.my/~ppsmfst/jqma/index.html |
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Digital Repository |
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Local University |
| institution |
Universiti Kebangasaan Malaysia |
| building |
UKM Institutional Repository |
| collection |
Online Access |
| description |
Risk creates an economic burden for society by compelling the creation of reserve funds,
raising the cost of certain services and excluding the provision of some goods and services.
Because of the threat of failure and insolvency, the risk of insurance company is closely
monitored by managers and regulators. Ever since the 1997 financial crisis that lead to the
liberalisation in the insurance industry, monitoring insurers that are in or heading a hazardous
condition has created a challenge to the regulatory bodies. Failure on the part of an insurer to
give due performance of its obligations can lead to the policyholders losing part of the
premiums paid or worse they or the third party may be deprived of any compensation due
when claims are made. Capital, also called surplus or equity, is the excess of assets over
liabilities. Technical insolvency occurs when obligations exceed assets requiring intervention
by the regulators. Solvency of an insurer is intimately linked to the condition of its financial
statement. Risk-based capital (RBC) is the theoretical amount of capital needed to absorb the
risks of conducting a business. For insurance, it is the amount of capital necessary to assure
major parties to insurer insolvency that the danger of failure is acceptably low. Generally,
RBC categorises risk into different components to cover the liquidity, asset management and
leverage aspects of an insurer. In this study, the risk-based capital is attempted to assess the
risk and financial strength of twenty general insurers in Malaysia from the years 2002 to 2004.
Our study found that based on RBC about a fifth of the insurers need regulatory intervention |
| format |
Article |
| author |
Saiful Hafizah Jaaman, Noriszura Ismail, Noriza Majid, |
| spellingShingle |
Saiful Hafizah Jaaman, Noriszura Ismail, Noriza Majid, Assessing risk and financial strength of general insurers in Malaysia |
| author_facet |
Saiful Hafizah Jaaman, Noriszura Ismail, Noriza Majid, |
| author_sort |
Saiful Hafizah Jaaman, |
| title |
Assessing risk and financial strength of
general insurers in Malaysia
|
| title_short |
Assessing risk and financial strength of
general insurers in Malaysia
|
| title_full |
Assessing risk and financial strength of
general insurers in Malaysia
|
| title_fullStr |
Assessing risk and financial strength of
general insurers in Malaysia
|
| title_full_unstemmed |
Assessing risk and financial strength of
general insurers in Malaysia
|
| title_sort |
assessing risk and financial strength of
general insurers in malaysia |
| publisher |
Penerbit ukm |
| publishDate |
2007 |
| url |
http://journalarticle.ukm.my/1835/ http://journalarticle.ukm.my/1835/ |
| first_indexed |
2023-09-18T19:34:28Z |
| last_indexed |
2023-09-18T19:34:28Z |
| _version_ |
1777405178254721024 |