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Risk Management for Enterprises and Individuals
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- Description
- Table of Contents
- Supplements
Publication Date: Jun 2009
License: Creative Commons
ISBN 10: 0-9823618-0-7
ISBN 13: 978-0-9823618-0-1
This book is intended for the Risk Management and Insurance course where Risk Management is emphasized.
When we think of large risks, we often think in terms of natural hazards such as hurricanes, earthquakes or tornados. Perhaps man-made disasters come to mind such as the terrorist attacks in the U.S. on September 11, 2001. Typically we have overlooked financial crises, such as the credit crisis of 2008. However, these types of man-made disasters have the potential to devastate the global marketplace. Losses in multiple trillions of dollars and in much human suffering and insecurity are already being totaled, and the global financial markets are collapsing as never before seen.
We can attribute the 2008 collapse to financially risky behavior of a magnitude never before experienced. The 2008 U.S. credit markets were a financial house of cards. A basic lack of risk management (and regulators' inattention or inability to control these overt failures) lay at the heart of the global credit crisis. This crisis started with lack of improperly underwritten mortgages and excessive debt. Companies depend on loans and lines of credit to conduct their routine business. If such credit lines dry up, production slows down and brings the global economy to the brink of deep recession–or even depression. The snowballing effect of this failure to manage the risk associated with providing mortgage loans to unqualified home buyers have been profound, indeed. When the mortgages failed because of greater risk- taking on the Street, the entire house of cards collapsed. Probably no other risk-related event has had, and will continue to have, as profound an impact world wide as this risk management failure.
How was risk in this situation so badly managed? What could firms and individuals have done to protect themselves? How can government measure such risks (beforehand) to regulate and control them? These and other questions come to mind when we contemplate the consequences of this risk management fiasco.
Standard risk management practice would have identified sub-prime mortgages and their bundling into mortgage-backed-securities as high risk. People would have avoided these investments or would have put enough money into reserve to be able to withstand defaults. This did not happen. Accordingly, this book may represent one of the most critical topics of study that the student of the 21st century could ever undertake.
Risk management will be a major focal point of business and societal decision–making in the 21st century. A separate focused field of study, it draws on core knowledge bases from law, engineering, finance, economics, medicine, psychology, accounting, mathematics, statistics and other fields to create a holistic decision-making framework that is sustainable and value- enhancing. This is the subject of this book.
- About the Authors
- Acknowledgments
- Dedications
- Preface
- Appendix A
- Appendix B
- Appendix C
- Appendix D
Patrick Lee Brockett
Dr. Pat Brockett is the Director of the Risk Management and Insurance Program and the Gus S. Wortham Memorial Chairholder in Risk Management and Insurance in the College and Graduate School of Business at The University of Texas at Austin where he teaches full time in risk management and insurance. He holds joint appointments as a Full Time Professor in the departments of Finance, Mathematics, and Management Science and Information Systems. He is currently President of The American Risk and Insurance Association.
In addition he is the Janey Slaughter Briscoe Research Fellow at the IC2 Institute and a Faculty Research Scientist at the Applied Research Laboratories at The University of Texas at Austin, and is the former Director of the Actuarial Science Program and former Director of the Center for Cybernetic Studies in the Graduate School of Business. He is a Fellow of the Institute of Mathematical Statistics, a Fellow of the American Statistical Association, a Fellow of the Royal Statistical Society, a Fellow of the American Association for the Advancement of Science, and a Chartered Statistician by the Royal Statistical Society. He is also a member of the Western Risk and Insurance Association, the International Actuarial Association (ASTIN section), and the Casualty Actuarial Society (Academic Corresponding Member).
Besides refereeing for numerous academic journals, he has published two books and over 100 journal articles. He is the Editor of the Journal of Risk and Insurance, and an Associate Editor of the journals Insurance: Mathematics and Economics. A Board Member of the North American Actuarial Journal, his articles in risk management and insurance have won several awards from the American Risk and Insurance Association (for Best Feature Article and for Best Communication Article) and from the American Statistical Association (for the Most Outstanding Statistical Application paper published in any field, in any journal, in any language, anywhere in the world), the Society of Actuaries (The Halmstad Prize for the most outstanding English language publication in actuarial science in the world), and from the International Insurance Society (best paper award) from the Casualty Actuarial Society ( for best paper on Casualty actuarial topics publish in an ARIA journal) and from the Faculty of Actuaries of Scotland and the Institute of Actuaries in England ( Brian Heys International Competition, 2nd Prize) . He has won The University of Texas university wide Outstanding Graduate Teacher Award as well as three different research awards from the Graduate School of Business. His research interests include formal and theoretical works on risk management topics as well as non-theoretical institutional or qualitative investigations into insurance contracts, ethics, and economics. He has also served as an expert consultant to regulatory bodies, law firms, and businesses.
Patrick L. Brockett received his Bachelor of Arts degree. in Mathematics from California State University, Long Beach, and his M.A. and Ph.D.,both in Mathematics, from the University of California, Irvine.
Yehuda Kahane
Dr. Kahane is active in both the academic and business areas. He is a professor of insurance and finance at Tel Aviv University. He founded and served as first dean for the Israel Academic School of Insurance. He served as Director of the Erhard Insurance Center, directed the Actuarial studies program, and coordinated the Executives Development Programs of Tel-Aviv University. He has founded, and directed the Chartered Life Underwriters CLU (Israel) Program. Dr. Kahane is a life and non-life actuary. He has served on the Israeli Insurance Council and on several government committees on a variety of insurance related topics.
Dr. Kahane is among the most prolific researchers in insurance. He served as an associate editor of the leading journals on risk and insurance. He taught at the Hebrew University of Jerusalem, the University of the Negev, the Universityof Florida, the University of Toronto, the Wharton School of the University of Pennsylvania, the University of Texas at Austin. In addition, he presented a large number of courses around the world.
Prof Kahane has also a rich entrepreneurial experience. He is a co-initiator of the concept of "new" balanced pension funds, and co-founded the first fund in Israel (Teshura). He is a co-founder and director in Ituran Location and Control, traded on both Nasdaq (ITRN) and the major list of Tel Aviv Stock Exchange. He owns the Weizman High Tech Technological Incubator, and is a partner of Capital Point that owns two other technological incubators. In addition he is involved in many voluntary activities and non profit organizations (e.g., Chairman of the Association of Blind People in Sharon District, Or Yarok - an association for prevention of traffic accident victims, The Assoc. for Delaying Age Related Processes, etc.).
He is married to Rivka (maiden name: Trieber), has 3 children and 3 (great) grandchildren.
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