[Social Security, Unemployment, and Systemic Risk in the U.S.A.]

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Acknowledgement

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DECLARATION

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Abstract

In this study we try to explore the concept of Social Security in a holistic context. The main focus of the research is on Social Security and its relation with Social Security, Unemployment, and Systemic Risk in the U.S.A using ruin theory for systemic risk..

Tale of Content

ACKNOWLEDGEMENT2

DECLARATION3

ABSTRACT4

INTRODUCTION6

THEORETICAL FRAMEWORK7

Pillar I: Equity Requirement7

Pillar II: Supervisory Process7

Pillar III: Market Discipline7

Ruin Theory and Systemic Risk8

Model of Risk11

Infection Process11

Definition 111

Poisson Process11

Definition211

Definition 3 compound Poisson process12

Definition 4 renewal process13

The reservations process13

Definition 514

Definition 615

Definition 715

Definition 815

Theorem 115

Lundberg Inequality Theorem 216

Demonstration16

DISCUSSION19

CONCLUSION22

REFERENCES24

Social Security, Unemployment, and Systemic Risk in the U.S.A

Introduction

The solvency of the insurer may be defined as the ability to meet its obligations to pay current and future claims of policyholders (IAIS 2000). We can understand the credit from two different perspectives: the solvency statins ca and dynamic solvency. The first of these is studied as the solvency of balance, that is, when at one point of time the insurer is able to cope obligations to its portfolio. To get a good credit the static insurer will have to manage a successful endowment and investment provisions of the unexpired risks and outstanding performance. Regarding the concept of solvency dynamics, we must consider the business of systemic risk companion as a flow continued revenue and payments that will evolve over time under the in- influence of various factors that cause accidents fluctuates around its average value. To cover these fluctuations is a necessary requirement financial guarantees above the technical provisions of premiums and benefits.

These control variables are essentially the solvency margin and supplies for deviations in claims, so we're talking about some free reserves that are not tied to the previously agreed commitments. Therefore, the concept of solvency is very broad and has to take into account all factors and circumstances that influence it. Some are endogenous, as the size and composition portfolio, risk selection, pricing, valuation reserves, reinsurance, investments ... Others are external, such as fluctuations in the insurance market and financial cial, inflation, regulations, structural and regulatory changes in society and in the international environment, the degree of activity in the national economy, etc.. There variety of methods to study the solvency. According Kastelijn and Remmerswaal (1986), can be grouped into three broad groups: methods based on ratios, methods especially considering the risk of variation in the total aggregate cost and methods including analysis of other sources of risk, adding factors such as cost, performances of assets, inflation, and cycles.

Theoretical framework

This work focus on the study of the theory developed by the solvency of the ...