Narrow Results

This paper reviews empirical studies with a particular interest in Islamic finance literature and highlights future research directions. The earlier literature on Islamic finance was built on the Islamic economic foundation of social justice and fairness, which was formed theoretically from the primary sources of Sharia coupled with some analytical frameworks. Subsequent studies emphasized the empirical investigations without including far-reaching analytical and theoretical postulations in the area. Although empirical studies on Islamic banking are plenty, there is a new body of emerging empirical literature on Islamic finance focusing on corporate finance and Takaful, whereas Islamic accounting studies are mostly qualitative. The literature provides a mixed picture of Islamic financial markets and instruments, showing that the Islamic ones perform better most of the time but also perform worse at times than their conventional counterparts. This paper discusses issues that are relevant to Islamic finance and identifies avenues for future research and policy implications.

The traditional financial industry has changed drastically with innovations in digital technology in the sector of finance. The new technology has not only altered the operations of financial services, but also changes the value chain of financial sector. Blockchain is one such technology which has proved to be a game changer in the financial industry. There are various studies on application of blockchain technology in the financial sector. This paper recommends a blockchain-based framework for the insurance industry. The need for this study is that there is an increasing requirement to improve the efficiency and customer experience, reduce the chances of fraud in insurance industry. Blockchain technology can prove to be a solution to the above-mentioned challenges. The methodology used to conduct this study is secondary data analysis and vast literature review. This study finds that there are various studies conducted in identifying the scope and application of blockchain in insurance industry but none of them suggests any framework to be implemented. This study suggests a framework to implement blockchain technology in insurance industry based on industry and academic literature.

Personal Finance Management (PFM) is crucial to control money to ensure that people have a comfortable present as well as secure future. It’s important for every individual to manage his finance digitally in the digital age. This study aims to identify the main dimensions of PFM from literature review and empirically test the impact of its each domain on the overall Digitalized Financial Management Behavior (DFMB). Also, the study verified the psychometric properties of the tool used to measure Personal Financial Management Behavior (PFMB) using digital platforms. The questionnaire was online administrated using Google forms among 388 young adults in the National Capital Territory (NCT) of India. The Kaiser–Meyer–Olkin (KMO) test of sampling adequacy and Bartlett’s test, linearity assessment, data screening were done in International Business Machines Statistical Package for Social Sciences (IBM SPSS). Factor analysis was done for unidimensionality assessment, bootstrapping (5000 resamples), and reliability and validity statistics in SmartPLS. The study identified six key dimensions of PFM from the existing significant literature and empirically verified the psychometric properties of the instrument in digital context. The resultant instrument includes 25 items under the six constructs. The study found that spending, credit management, saving behavior, personal cash management, investment and insurance are theoretically and empirically important determinants of PFM practices using digital platform therefore more attention need to be paid to these determinants for promoting sound DFMB.

Using the China Household Finance Survey data in 2011, the estimation results of structural equation modeling demonstrate that the respondents with higher time preference rate have a significant higher probability of investing in stocks, which implies that the short-term households will prefer stock investment. The social insurance programs and insurance policies held by the family will have a significantly direct positive effect in promoting stock investment and also a significantly direct positive effect on the respondent’s time preference, which could further indirectly increase the family’s stock investment. These results show that the safety-net built by the Chinese government, including the social security and commercial insurance, is very likely to attract more short-term investors into the stock market. These empirical results provide new evidences to explain the extreme volatility of Chinese stock market and also testify the policy effect of building an environment for people to possess property income in China.

The insurance industry has numerous areas with potential applications for neural networks, fuzzy logic and genetic algorithms. Given this potential and the impetus on these technologies during the last decade, a number of studies have focused on insurance applications. This chapter presents an overview of these studies. The specific purposes of the chapter are twofold: first, to review the insurance applications of these technologies so as to document the unique characteristics of insurance as an application area; and second, to document the extent to which these technologies have been employed.

The terms reliability, warranty and insurance are interwoven in some ways. The warranty of system and insurance coverage offered by the manufacturer or third party reflects its potential reliability. In certain situations, the insurance may expire before the warranty time. To address this issue, the reliability and sensitivity analysis of a single-unit insured system has been carried out. The system may functions in warranty period with or without insurance cover whereas no insurance cover is given during nonwarranty period. If faults are covered under warranty or the insurance terms, the manufacturer or insurance company is liable to pay all the repair/replacement costs; otherwise, the user must pay the entire cost. The reliability metrics of the system and factors impacting system profitability are derived using Markov and regenerative processes. Profit equations and sensitivity functions are established for all stakeholders. The sensitivity function for system availability is also derived for all the possible considered periods. Exponential distribution is used to illustrate the developed model numerically.

In this paper, we study the valuation of variable annuities for an insurer. We concentrate on two types of these contracts, namely guaranteed minimum death benefits and guaranteed minimum living benefits that allow the insured to withdraw money from the associated account. Here, the price of variable annuities corresponds to a fee, fixed at the beginning of the contract, that is continuously taken from the associated account. We use a utility indifference approach to determine the indifference fee rate. We focus on the worst case for the insurer, assuming that the insured makes the withdrawals that minimize the expected utility of the insurer. To compute this indifference fee rate, we link the utility maximization in the worst case for the insurer to a sequence of maximization and minimization problems that can be computed recursively. This allows to provide an optimal investment strategy for the insurer when the insured follows the worst withdrawal strategy and to compute the indifference fee. We finally explain how to approximate these quantities via the previous results and give numerical illustrations of parameter sensitivity.

In this paper, we shall propose a Monte Carlo simulation technique applied to a G2++ model: even when the number of simulated paths is small, our technique allows to find a precise simulated deflator. In particular, we shall study the transition law of the discrete random variable :

Insurance companies have to build a reserve for their future payments which is usually done by deterministic methods giving only a point estimate. In this paper two semi-stochastic methods are presented along with a more sophisticated hierarchical Bayesian model containing MCMC technique. These models allow us to determine quantiles and confidence intervals of the reserve which can be more reliable as just a point estimate. A sort of cross-validation technique is also used to test the models.

In this paper, we develop an expected utility maximization model for Chinese rural residents who make their health care and health insurance decisions in two stages, choosing among no insurance, the New Rural Cooperative Medical System (NRCMS), and a commercial health insurance. It is found that although not everyone benefits from the NRCMS, it does improve the welfare of a large number of rural residents and help them seek a higher level of medical care service. The results suggest that additional aid to the extremely poor is still needed during catastrophic medical loss, and detailed provisions that can differentiate the support level to rural residents based on income are needed. It is also found that commercial health insurance can still play a role in protecting rural residents from financial losses caused by health risks.