1 Department of Business Studies, Aarhus School of Business, Aarhus BSS, Aarhus University2 Finance Research Group, Aarhus School of Business, Aarhus BSS, Aarhus University3 Department of Economics and Business Economics, Aarhus BSS, Aarhus University4 Department of Economics and Business Economics, Aarhus BSS, Aarhus University
A Case Study of the Traffic Light Option
Life and Pension companies are facing enhanced risks of market due to dynamic interest rates and unprecedented volatility in equities, jeopardising guarantee of performance to policyholders and shareholders. Evolving statutory requirements and financial reporting standards, add to the challenges for these companies. This paper highlights the utility of "Hybrid Derivatives" and the new risk based solvency reporting system, know as "Traffic Light System" adopted by the Danish Financial Supervisory Authority, as an answer to the challenges posed.
Journal of Insurance and Risk Management - Pravartak, 2009, Vol IV, Issue 3, p. 49-59