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South African Actuarial Journal Volume 3 (2003)

 

Seismic risk assessment: With an application to the South African insurance industry

Author(s): N Davies and A Kijko
Abstract:
This study provides a seismic risk assessment for various sites in South Africa and discusses the possible impact of seismic activity on the South African insurance industry in the light of this analysis. The work begins with an introduction and an historical perspective on the estimation of seismic damage to buildings. The methodology for the estimation of expected damage from a probabilistic point of view is presented. The work continues with an application of the described methodology to several sites around the country. The result of the investigation is that the seismic risk faced by South Africa is non-negligible.
Keywords: Seismic risk, seismic hazard, expected damage, South Africa, short-term insurance

Seismic risk assessment: With an application to the South African insurance industry (pdf)

Investment guarantees in the South African life insurance industry

Author(s): K Foroughi, IA Jones and A Dardis
Abstract:
This paper explores the risks faced by South African life insurance companies arising from the provision of investment guarantees in products sold. The current thinking and practice of the larger South African life insurance companies regarding investment guarantees is set out following their responses to a survey.
The paper examines the forms of investment guarantee available and the business issues created by the writing of these guarantees. These include issues around the design and pricing of new business, as well as the risk management of in-force business.
The paper also compares existing methods used internationally to value life insurance business with investment guarantees, focusing on the use of stochastic models. The different allowances for risk within each valuation method and the appropriateness of these allowances when valuing investment guarantees are considered. The stochastic models compared include both statistically based real-world models and market-consistent state-price-deflator or risk-neutral models. Practical issues around the building of such asset–liability stochastic models are briefly discussed.
Finally, the authors put forward their own views of possible developments in the future within South Africa that may impact on life insurance business with investment guarantees, and the possible implications.
Keywords: Investment guarantee; maturity guarantee; South Africa; non-profit guarantee; smoothed-bonus business; asset–liability matching; market risk premium; financial options; hedging; equity volatility; stochastic modelling; market-consistent valuation

Investment guarantees in the South African life insurance industry (pdf)

Minimum benefits for HIV/AIDS in South African medical schemes

Author(s): HD McLeod, Z Achmat and AM Stein
Abstract:
This paper provides the results of a survey of the structure of HIV/AIDS benefits in open and restricted medical schemes in South Africa in 2002. The results of the survey were used to develop a series of recommendations to the Minister of Health in respect of the extent of prescribed minimum benefits for HIV/AIDS. Medical schemes are required to provide the PMBs to their members without limits or co-payments.
Keywords: Medical schemes; HIV; AIDS; benefits; prescribed minimum benefits

Minimum benefits for HIV/AIDS in South African medical schemes (pdf)

Editorial

SAAJ Volume 3 Editorial (pdf)

The views and opinions expressed in this journal are, unless otherwise stated, those of the authors. Editorial opinion or comment is, unless otherwise stated, that of the Editor and publication thereof does not indicate the agreement of the Actuarial Society of South Africa.

Actuarial Society of South Africa
The content of SAAJ is licensed under a Creative Commons Attribution 3.0 Licence.
Cover design: The Fire Room, Cape Town
DTP: User Friendly, Cape Town
ISSN-8: 1680-2179
ISSN-13: 977-1680-2170-02