IMPACT OF RISK FACTORS ON BUSINESS RESULTS OF LIFE INSURANCE PRODUCTS IN INSURANCE COMPANIES IN HUE CITY

Abstract

Abstract: On the basis of the leveraging Monte Carlo simulation method and @Risk – a risk analysis software, this study aims to identify and analyse the impacts of the potential risk factors on business results of life insurance products in the insurance companies in Hue city. Both the qualitative and quantitative method is applied. Data were collected from interviewing the leaders, financial managers and senior consultants at four most representative life insurance companies in the area, namely Bao Viet life insurance, Prudential, AIA, and PCI Sun Life using the DELPHI technique. The following findings are found. Firstly, besides the identified events, 10 other types of risks could affect the business results of life insurers. Secondly, these types of risks have varied frequencies and levels of impact on the three studied variables of the simulation model. Finally, the risk of rumours and the risk of new competitors appear to be the most significant dangers to the expected profits of life insurance companies.Keywords: Monte Carlo simulation, @Risk, Delphi technique, life insurance