Indian insurance sector has seen paradigm shift in the distribution. From agent commission mode to corporate supply chain. Further, third party organization involved. Apart from this technology and payment system are changing very fast. Thus, the discussion topic is:
Discuss various supply chain models in the insurance sector.
Discuss various supply chain models in the insurance sector.
71 comments:
Vanishree bhat
2GI18MBA54
Many banks provide supply-chain finance solutions that might include insurance services that further mitigate trade risk such as the default of suppliers. This study proposes the development of an insurance model that uses the Black-Scholes-Merton Model (BSM) (1973) for default prediction and risk pooling management techniques as a way to reduce the risk due to supplier bankruptcy and estimate an insurance premium that banks can use to charge this service to their customers.
Krupa Deshpande
2GI18MBA20
The various supply chain models in insurance sector are:
1. The Black Scholes Morton model (BSM)
2. risk pooling model technique which reduces the risk
3. According to the 2017 report of Business Continuity Institute (BCI), for more than half the companies polled (51%), losses related to the interruption of supply chain are not insured.
Sonali sheth
2GI18MBA50 one of the models in insurance sector is(CBI)
Companies suffering interruption losses resulting from damage to third- party facilities often do not realize that they may be protected by their insurance program. Contingent Business Interruption (CBI) insurance protects a company from business interruption losses when a logistics system fails due to a covered cause of loss. A company may be protected from such losses even if the company itself has not suffered any damage to its own property.
Step 1—Risk Identification
SupplyChain Risk Management Practice (SCRM) undertakes a comprehensive review of a client’s exposures. In particular, the SCRM team identifies a client’s supply chain needs—e.g., product, service, brand, or supplier—and assesses and maps the supply chain process from a risk standpoint.
Step 2—Risk Measurement
The SCRM team then articulates the client’s exposures in a comprehensive and understandable format for the underwriters. They do so using a variety of tools, including impact modeling, forensic accounting, and gap analysis.
Step 3—Risk Treatment and Insurance
Underwriters use the risk analysis to make qualified decisions about a client’s vulnerability and to structure and price the insurance coverage.
Program design.
Market submission and communication.
Analysis of options and recommendations.
2GI18MBA22
Nikhil shivapujimath
2GI18MBA30
The number of companies having underwritten an insurance policy has risen from 4% in 2016 to 13% one year later. Despite this coverage rate, in clear improvement, the risk of supply chain disruption remains largely under insured.
Corporate high exposure and the substantial losses incurred are likely to trigger a gradual regain of awareness that will allow the emergence of more resilient supply chains.
Jaya.Chhapru
USN-2GI18MBA15
1.The traditional supply chain
Typical insurance products and services are usually designed and marketed to downstream customers by a ‘supply chain’ of carefully crafted insurance products. The business model uses actuarial language to estimate and quantify a ‘fortuitous’ risk, along with the ability of the insurers (brokers, underwriters and reinsurers) to efficiently transfer and distribute some (or all) of the risks away from the client downstream towards reinsurers upstream.
2.The insurance industry value chain
The premium itself is finite. That creates a zero-sum game between supposedly collaborating insurers operating on a supply chain. Every insurance provider providing a product or service along the supply chain seeks to gain ‘competitive’ advantage with the end customer.
3.The captive insurance business model
Owning a captive subsidiary changes the traditional insurance product-service dynamic dramatically. The traditional supply-value chain construct no longer applies. The client customer becomes a member of the value chain and takes over the key activities of the broker and underwriter, effectively making itself into an insurance company in its own right.
Need related answer
Vinita Kadam
2GI18MBA58
To facilitate the flow of products, information is shared up and down the supply chain, i.e. with suppliers and clients. This sharing of information enables all parties to plan appropriately to meet current and future needs. The more that companies within a supply chain can integrate and coordinate their activities, the more likely they will be to optimise the flow of goods from supplier to customer and react effectively to changes in demand.
Nikhil Sapare
2GI18MBA29
Risk man-
agement for Supply Chain will help to understand the critical risk management
issues that affect supply chains. The discussion of the Credit Analysis literature
will help to understand the different techniques used by banks to estimate default
probabilities of institutions that can help us to feed risk management models that
can be used to offer insurance services for the supply chain. Risk pooling litera-
ture will help to understand how this concept can be used to develop insurance
services in the supply chain services industry. Finally, literature on Monte Carlo
analysis will help us to understand how this technique can be used to validate the
model and estimate losses that can be used to valuate insurance premiums, es-
timate maximum losses and risk estimates. The literature is divided in multiple
themes including Supply Chain Finance, Risk Management in Supply Chain and
Credit Risk Management.
Shweta uttam jagtap
2GI18MBA49
There are various models
1- risk pooling model technique
This model is used to control the risk and bear the uncertain risk that might occur
Discuss about bancassurance model
Varun Patil
2GI18MBA55
There are many insurance products available to protect companies against supply chain disruption outside standard Property and Business Interruption cover.
Some insurance companies and brokers have worked very hard to deliver workable solutions, but it is proving to be challenging for them to deliver the right products in relation to increasingly complex supply chains.The main take-up for supply chain insurance has been among pharmaceutical, motor and food manufacturing firms
Abhish Kamat
USN 2GI18MBA01
Many banks provide supply-chain finance solutions that might include insurance services that further mitigate trade risk such as the default of suppliers. This study proposes the development of an insurance model that uses the Black-Scholes-Merton Model (BSM) (1973) for default prediction and risk pooling management techniques as a way to reduce the risk due to supplier bankruptcy and estimate an insurance premium that banks can use to charge this service to their customers. In order to demonstrate the use of the proposed insurance model, a sample of companies is selected from the New York Stock exchange and data for historical stock prices from the CRSP database (Center for Research in Security Prices) is collected in order to calculate the probability of bankruptcy of a sample of suppliers from different industries by using the BSM model.
1 Black scholes Morton model
The Black–Scholes or Black–Scholes–Merton model is a mathematical model for the dynamics of a financial market containing derivative investment instruments
2 Risk pulling model
Under this system, insurance companies come together to form a pool, which can provide protection to insurance companies against catastrophic risks such as floods or earthquakes or any other disasters.
Shweta uttam
2GI18MBA49
Bancassurance is an arrangement in which a bank and insurance company form a partnership so that the insurance company can sell its products to the bank's customer base.
By this the company can have large number of customers at a single place
Megha Ingale
2GI18MBA24
* Black-Sholes-Merton model A model that is used to ensure that an instrument is priced consistently with the observed market prices of other similar instruments is the Black-Scholes-Merton model (BSM) (Hull 2012).
* Risk Pooling for Risk Management A risk pool is one of the forms of risk management practiced in insurance. Pooling arrangements do not change a company’s expected loss, but reduce the uncer-tainty (standard deviation) of a loss.
*Monte carlo analysis Monte Carlo analysis is a technique that is used in Finance in order to simulate losses in financial risk management (Hull 2012). The idea of Monte Carlo simula-
17 tions is to generate random numbers in order to model the stochastic behavior of an input parameter. Each different sequence of random numbers causes another result.
Monika Patil
2GI18MBA25
Companies suffering such disruptions should consider whether CBI insurance covers its losses due to such supply and distribution chain problems. Making a CBI claim requires a thorough understanding of the policy and related issues, such as applicable deductibles, the scope of the business interruption, the calculation of loss, and potential applicability of exclusions. This article provides an overview of what you need to know in order to maximize recovery from a property insurance program after business is interrupted due to a supply and distribution chain disruption.
Sonali sheth
2GI18MBA50
“Bancassurance model is an arrangement in which a bank and insurance company form a partnership so that the insurance company can sell its products to the bank's customer base.” The bancassurance model was introduced in Europe
Rohan J Shanbhag
USN - 2GI18MBA42
The various supply chain models are:
1. Bancassurance model : is an arrangement in which a bank and insurance company form a partnership so that the insurance company can sell its products to the bank's customer base.” The bancassurance model was introduced in Europe in the 1980s. bancassurance channel to life insurance premiums.
2. Risk pooling model : Risk pooling is the collection and management of financial resources so that large, unpredictable individual financial risks become predictable and are distributed among all members of the pool
3. Black Scholes Morton model (BSM) : is a differential equation used to solve for options prices. The model won the Nobel prize in economics. The standard BSM model is only used to price European options and does not take into account that U.S. options could be exercised before the expiration date.
Ankit Poddar
2GI18MBA33
Bancassurance is the insurance distribution model where insurance carriers and banks join forces to sell insurance products to consumers.
The channel utilizes the respective strengths of insurance carriers and banks to not just distribute insurance policies in a whole new way, but to increase customer satisfaction and maximize their own profits and reduce costs.
Akshata Shiroshi
2GI18MBA06
financial considerations, such as whether or not certain treatments are covered by insurance.
Decisions made by one party often affect the options available to other parties, as well as the costs of these options, in ways that are not well understood.
*centralized decision models may be useful for coordinating the operations of segments of the larger system controlled by a single decision-making body.
the Black-Scholes-Merton Model (BSM) for default prediction and risk pooling management techniques as a way to reduce the risk due to supplier bankruptcy and estimate an insur-ance premium that banks can use to charge this service to their customers.
The expected losses for a risk pool can be used by a financial institution in order to price an insurance contract that hedges a company against the risk of default of suppliers.
Utkarsha Desai
2GI18MBA53
Risk management
Credit ratings & credit risk management.
Pricing support
Risk pooling
The number of companies using insurance has increased in the last years. To facilitate the flow of product information is shared with the supply chain. This information sharing enables all the parties to plan their current and future needs
Corporates high exposure and the substantial base are likely to trigger awareness that will call for growth in the supply chains
Yojan S
USN 2GI18MBA60
Siddeshwar M
2GI18MBA47
A supply chain financial management insurance is a possible way to hedge a company against the risk of bankruptcy of suppliers.
* Black-Sholes-Merton model- A model that is used to ensure that an instrument is priced consistently with the observed market prices of other similar instruments is the Black-Scholes-Merton model.
* Risk Pooling for Risk Management- A risk pool is one of the forms of risk management practiced in insurance. Pooling arrangements do not change a company’s expected loss, but reduce the standard deviatin of a loss.
*Monte carlo analysis- Monte Carlo analysis is a technique that is used in Finance in order to simulate losses in financial risk management. The idea of Monte Carlo is to generate random numbers in order to model the stochastic behavior of an input parameter. Each different sequence of random numbers causes another result.
Akshata Shiroshi
2GI18MBA06
Bancassurance- is a relationship between a bank and an insurance company that is aimed at offering insurance products or insurance benefits to the bank's customers.
Pooja Gouli
2GI18MBA34
The bancassurance distribution model for insurance grew to capitalize on this opportunity – to increase the distribution reach with the least possible resources (in terms of infrastructure, manpower and time). Banks with their vast reach in the financial services market were the perfect vehicle to aid the insurance carriers in this endeavor and thus rose the bancassurance channel.
In certain markets around the world, the growth rate for bancassurance is four times the growth of life insurance. Now, with this opportunity, it’s obvious that the competition would be immense as well, and it is, with many insurers and banks launching new alliances all over the globe.
How india post acts as a insurance channel?
Suchita Koujalagi
USN : 2GI18MBA51
Supply is interdepent on many things and one among them is insurance sector
Insurance sector helps a lot in globally sourcing the raw materials or ready to use things.
But their are few problems like what if accident during transport, theft during transport or any natural calamity affecting the raw material who is held responsible the buyer or the seller? Here the insurance companies play a vital role helping both the parties.
Insurance is one tool for managing costly and common supply chain interruptions.
Apoorva karva
2GI18MBA08
There are many insurance products available in the market to protect companies against supply chain disruption outside standard Property and Business Interruption cover.
The various models of supply chain are:
1.Bancassurance model
2.Risk pooling model
3.Black Scholes Morton model
Nitin Gahlot
2GI18MBA31
Bancassurance is an arrangement in which a bank and insurance company form a partnership so that the insurance company can sell its products to the bank's customer base.”
Source: leadsquared.com
Apoorva karva
2GI18MBA08
Bancassurance model:
It is a relationship between insurance company and banks. It is the insurance distribution model where insurance carriers and banks join forces to sell insurance products to consumers.
The bancassurance model was introduced in Europe
VIJAYTA KALE
2GI18MBA57
SCOR Supply chain operation reference model
insurance supply chain
bancassurance model
risk pooling and risk management
Black scholes Morton model ie, BSM model.
virtual supply chain
The Black Scholes model, also known as the Black-Scholes-Merton model, is a model of price variation over time of financial instruments such as stocks that can, among other things, be used to determine the price of a European call option.
Bancassurance is the insurance distribution model where insurance carriers and banks join forces to sell insurance products to consumers.
The Supply Chain Operations Reference (SCOR) model is unique in that it links business processes, performance metrics, practices, and people skills into a unified structure. It is hierarchical in nature, interactive and interlinked.
Manjunath kolkar
USN 2GI18MBA23
Black-Sholes-Merton model
A model that is used to ensure that an instrument is priced consistently with the
observed market prices of other similar instruments is the Black-Scholes-Merton
model (BSM)
Monte carlo analysis Monte Carlo analysis is a technique that is used in Finance in order to simulate losses in financial risk management
Risk Pooling for Risk Management A risk pool is one of the forms of risk management practiced in insurance.
NITIN GAHLOT
2GI18MBA31
Indian post is involved in accepting deposits under Small Savings Schemes, providing life insurance cover under Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI).
Akshata N
USN 2GI18MBA05
There are many insurance products to protect companies against supply chain disruption outside standard property .
The various chain models in insurance sector are :
* According to 2017 report of the Business Continuity Institute for more than half of the companies pooled 51% losses related to the interruption of the supply chain are not insured.
* Corporate high exposure and substantial losses incurred are likely to trigger of awareness that will allow emergence of more resilent supply chain.
* Risk pooling model techniques ehich reduces the risk.
Good answers on banc assurance and india post
Please throw light on payment intermediaries in insurance.
Amol Mutgekar
2GI18MBA07
It is critical for health insurance market players to be aware of the developments and changes occurring in the market due to the integration of the digital component. New solutions developed by health insure-tech companies attack all parts of the health insurance industry value chain, such as product placement, member acquisition and member management, even expanding it into the dimension of health care delivery.
There are four major areas of operation health insurance
1. Product placement
Over the last few years, insure-tech companies have launched new health insurance plan comparison and enrollment services delivered through special digital web or app platforms. These solutions go beyond simple comparison and selection, they also provide member companion services just like a traditional health insurance company does. For example, mobile apps helping insured members get information about their health plan reimbursement scheme, book a doctor appointment or file a claim. This will create a new layer between members and health insurance companies, which has to be addressed by payer organizations in order not to lose the opportunity to get direct member access themselves by using digital solutions.
2. Member acquisition
Member acquisition is as at the heart of new digital business models invented by health insure-tech companies. Offering free or discounted activity trackers or health sensors allowing new members to track their health status and get benefits in return (reduced premiums or copayments, gift cards) is a common model to attract customers
3. Member management
Digital technologies’ integration also transforms the way payor organizations deal with the community of enrolled members, both in the areas of health data tracking and a suit of digital solutions for patient engagement improvement such as portals for claims management and online doctor appointments. The idea of rewarding healthy behavior with reduced monthly payments is not new. Digital technologies just make it much easier today.
4. Health care delivery
New digital business models are also being used to blur the line between a payer organization and health care delivery. Digital technology provided by the payer organization is used to offer health services that were previously provided only by doctors and nurses. Now digitally enabled coaching programs, diagnosis and second opinion support, doctor recommendations are a part of insure-tech offerings. This goes hand in hand with massively improved data exchange between payers and providers inside and outside the network. It includes tracked health data of the patients allowing to establish closer links between payers and HCPs and nurses.
Source - https://research2guidance.com
SANI PATIL
USN 2GI18MBA45
1.Black-Scholes-Merton Model (BSM)
for prediction and risk pooling management techniques as a way to reduce the risk due to supplier bankruptcy and estimate an insurance premium that banks can use to charge this service to their customers
2.Zurich Insurance MODEL,
there is still little attention from academia for the development of an insurance model that can be used by institutions to offer this instrument that can
protect against supplier’s bankruptcy risk. This study proposes the development of an insurance model
3. Z-Score MODEL
values can be calculated for any company that is
willing to disclose financial statements even if these are not public.
Nivedita kadam
2GI18MBA32
The various supply chain models are:
1.Black Scholes Morton model(BSM):
The Black Scholes model, also known as the Black-Scholes-Merton (BSM) model, is a mathematical model for pricing an options contract. In particular, the model estimates the variation over time of financial instruments. It assumes these instruments (such as stocks or futures) will have a lognormal distribution of prices.
2.Bancassurance model:
Bancassurance is an arrangement in which a bank and insurance company form a partnership so that the insurance company can sell its products to the bank's customer base.” The bancassurance model was introduced in Europe in the 1980s. bancassurance channel to life insurance premiums.
3.Risk pooling model:
Risk pooling is the collection and management of financial resources so that large, unpredictable individual financial risks become predictable and are distributed among all members of the pool. Risk pooling can provide financial protection to households in the face of high health care costs.
Prakash N
2GI18MBA38
There are many insurance products available to protect companies against supply chain disruption outside standard Property and Business Interruption cover..
Some insurance companies and brokers have worked very hard to deliver workable solutions, but it is proving to be challenging for them to deliver the right products in relation to increasingly complex supply chains.The main take-up for supply chain insurance has been among pharmaceutical, motor and food manufacturing firms.
Neha patil
2GI18MBA27
MODELS IN SUPPLY CHAIN MANAGEMENT IN INSURANCE
1.Black-Scholes-Merton Model (BSM)
The Black-Scholes-Merton (BSM) model is a pricing model for financial instruments. It is used for the valuation of stock options. The BSM model is used to determine the fair prices of stock options based on six variables: volatility, type, underlying stock price, strike price, time, and risk-free rate. It is based on the principle of hedging and focuses on eliminating risks associated with the volatility of underlying assets and stock options.
2. “Bancassurance -is an arrangement in which a bank and insurance company form a partnership so that the insurance company can sell its products to the bank's customer base.” The bancassurance model was introduced in Europe
Neha patil
2GI18MBA27
MODELS IN SUPPLY CHAIN MANAGEMENT IN INSURANCE
1.Black-Scholes-Merton Model (BSM)
The Black-Scholes-Merton (BSM) model is a pricing model for financial instruments. It is used for the valuation of stock options. The BSM model is used to determine the fair prices of stock options based on six variables: volatility, type, underlying stock price, strike price, time, and risk-free rate. It is based on the principle of hedging and focuses on eliminating risks associated with the volatility of underlying assets and stock options.
2. “Bancassurance -is an arrangement in which a bank and insurance company form a partnership so that the insurance company can sell its products to the bank's customer base.” The bancassurance model was introduced in Europe
JAYATIRTHA GUMASTE
2GI18MBA16
Risk Pool :A risk pool is one of the forms of risk management mostly practiced by insurance companies. Under this system, insurance companies come together to form a pool, which can provide protection to insurance companies against catastrophic risks such as floods or earthquakes.
Black-Scholes: is a pricing model used to determine the fair price or theoretical value for a call or a put option based on six variables such as volatility, type of option, underlying stock price, time, strike price, and risk-free rate.
Monte Carlo simulation: is a computerized mathematical technique that allows people to account for risk in quantitative analysis and decision making. The technique is used by professionals in such widely disparate fields as finance, project management, energy, manufacturing, engineering, research and development, insurance, oil & gas, transportation, and the environment.
Many are discussing theoretical models but i was interested in supply chain models
Karan Nilajkar
2GI18MBA18
The models of the insurance in supply chain are the import models that helps the company overcome from the risk.In india the insurance is sold trought various mode and now one of the new mode is come by the technology every one is availing that through online
The Black sholes merton model in this model the instrument in the price consistently by the observed market price of other Black sholes merton
Risk pooling model it helps to understand the critical risk that will affect the supply chain it helps the companies to reduce the assumed risk by pooling arrangements.
Selling and receving payments on ATM
Premium points
Sthree shakti
Micro insurance
The some of supply chain models are:
*The continuous flow models
*The fast chain models
*The efficient chain models
*The custom configured model
*The agile model
*The flexible model
Google pay and paytm app payment
LIC app and websites
Payment gateway like oxygen and citrus
Cyber security companies
IT and ITES companies
Deepa Kanbargi
USN: 2GI18MBA11
The adoption of various prevention measures does not exonerate companies from seeking solutions with their insurers. The latter relentlessly continue to develop a range of covers against the interruption of supply chain. There are currently several kinds of policies covering this risk: business interruption (BI), continuity business insurance (CBI), trade disruption insurance (TDI)(1),…
The classical business interruption insurance plans do not meet the new needs of globalized corporate business. They are too restrictive as oftentimes they are confined to the coverage of losses after the occurrence of fire or machinery breakdown.The new schemes proposed by insurers are much broader, covering a wider range of risks: delivery delay, bankruptcy of a subcontractor
Fraud detection and claim settlement companies
Chaitrali Shahapurkar
2GI18MBA09
Companies suffering interruption losses resulting from damage to third- party facilities often do not realize that they may be protected by their insurance program.
To facilitate the flow of products, information is shared up and down the supply chain, i.e. with suppliers and clients. This sharing of information enables all parties to plan appropriately to meet current and future needs. The more that companies within a supply chain can integrate and coordinate their activities, the more likely they will be to optimise the flow of goods from supplier to customer and react effectively to changes in demand.
Neha Khemalapure
USN:2GI18MBA28
Bancassurance model:
Bancassurance is an arrangement in which a bank and insurance company form a partnership so that the insurance company can sell its products to the bank's customer base.” The bancassurance model was introduced in Europe in the 1980s. bancassurance channel to life insurance premiums.
Bancassurance is an arrangement in which a bank and insurance company form a partnership so that the insurance company can sell its products to the bank's customer base.”
Aishwarya Tadasad
USN 2GI18MBA02
The adoption of various prevention measures does not exonerate companies from seeking solutions with their insurers. The latter relentlessly continue to develop a range of covers against the interruption of supply chain. There are currently several kinds of policies covering this risk: business interruption (BI), continuity business insurance (CBI), trade disruption insurance (TDI)
The classical business interruption insurance plans do not meet the new needs of globalized corporate business. They are too restrictive as oftentimes they are confined to the coverage of losses after the occurrence of fire or machinery breakdown.The new schemes proposed by insurers are much broader, covering a wider range of risks: delivery delay, bankruptcy of a subcontractor
The models of the insurance in supply chain are the import models that helps the company overcome from the risk.In india the insurance is sold trought various mode and now one of the new mode is come by the technology every one is availing that through online
The Black sholes merton model in this model the instrument in the price consistently by the observed market price of other Black sholes merton
Risk pooling model it helps to understand the critical risk that will affect the supply chain it helps the companies to reduce the assumed risk by pooling arrangements.
Supply is interdepent on many things and one among them is insurance sector
Insurance sector helps a lot in globally sourcing the raw materials or ready to use things.
But their are few problems like what if accident during transport, theft during transport or any natural calamity affecting the raw material who is held responsible the buyer or the seller? Here the insurance companies play a vital role helping both the parties.
Insurance is one tool for managing costly and common supply chain interruptions.
Firdous Mohammed
USN 2GI18MBA12
Companies cannot avoid all the risks inherent to their “business model”. They may nonetheless make recourse to the mapping of their supply chain in order to identify the threats they are under and reduce their exposure accordingly.
Risk assessment is carried out at different levels of the supply chain:
Within the company itself,
Upstream: service or raw material suppliers,
Downstream: distributers,transporters,…
At the level of corporate environment: economic, geopolitical and climate risks,…
The diversification of key suppliers, the latter’s auditing, training, awareness-raising and the design of crisis and recovery plans stand among prevention solutions.
While such measures seem to be effective, they remain, nonetheless, restrictive and contrary to the objective of reducing costs and maximizing the logistic chain.
Kanchan D
2GI18MBA17
Today's dramatically changing business environment has created new risks for organisations which in turn has created a greater awareness of supply chain exposures and the need for viable solutions
The risk of a supply chain glitch is a threat that has given risen with the increased demand for just in time delivery higher storage costs and hazards beyond the company control, this risk is ever present without there having to be any physical risk of damage to any of the insured party interest
Roshan Kurdekar
USN 2GI18MBA43.
ANS. Investing in Life insurance companies may appear risky as these businesses consist of long-term products and services, and also require high initial acquisition cost.
Therefore, a financial statement that provides the current year’s realised income, with the entire acquisition cost charged upfront, provide an incomplete picture of value creation and profitability is what one should look at on investing in these companies.
Shivani Raikar
USN 2GI18MBA48
Many banks provide supply-chain finance solutions that might include insurance services that further mitigate trade risk such as the default of suppliers. This study proposes the development of an insurance model that uses the Black-Scholes-Merton Model (BSM) (1973) for default prediction and risk pooling management techniques as a way to reduce the risk due to supplier bankruptcy and estimate an insurance premium that banks can use to charge this service to their customers. In order to demonstrate the use of the proposed insurance model, a sample of companies is selected from the New York Stock exchange and data for historical stock prices from the CRSP database (Center for Research in Security Prices) is collected in order to calculate the probability of bankruptcy of a sample of suppliers from different industries by using the BSM model.
Kusum shidling
USN 2GI18MBA21
A SUPPLY CHAIN MANAGEMENT INSURANCE MODElE CALLED THE BLACK-SCHOLES-MERTON MODEL.
Black-Sholes-Merton model A model that is used to ensure that an instrument is priced consistently with the observed market prices of other similar instruments is the Black-Scholes-Merton model (BSM) (Hull 2012). The BSM option pricing model (Black & Scholes1973) can be used to estimate the probability of bankruptcy of suppliers by extracting and examining the riskiness in the stock market price of suppliers.
The basic idea for estimating the probability of a supplier company bankruptcy is to recognize the stock price movement pattern of the supplier company, and evaluate historic events information, which is available to the public via company press meets, market focus, and so on.
The model assumes that volatility is a crucial variable in bankruptcy prediction since it captures the likelihood that the value of a firm’s assets will decline to such an extent that the firm will be unable to repay its debts. Equity can be viewed as a call option on the value of the firm’s assets.
Prajwal B. G.
2GI18MBA37
1 Black scholes Morton model
The Black–Scholes or Black–Scholes–Merton model is a mathematical model for the dynamics of a financial market containing derivative investment instruments
2 Risk pulling model
Under this system, insurance companies come together to form a pool, which can provide protection to insurance companies against catastrophic risks such as floods or earthquakes or any other disasters.
Vittal SB
2GI18MBA59
There are various models
1- risk pooling model technique
This model is used to control the risk and bear the uncertain risk that might occur
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