The Measurement of the Volatility of Market Risk of Viet Nam Insurance Industry after the Low Inflation Period 2015-2017

  • Dinh Tran Ngoc Huy International University of Japan

Abstract

Insurance industry in Viet Nam has been growing much, achieving more market share and contributing quite a lot for the economic growth  in recent years. This paper measures the volatility of market risk in Viet Nam insurance industry after this period (2015-2017). The main reason is the necessary role of the insurance company system in Vietnam in the economic development and growth in recent years always go with risk potential and risk control policies. This research paper aims to figure out how much increase or decrease in the market risk of Vietnam insurance firms during the post-low inflation environment 2015-2017. First, by using quantitative combined with comparative data analysis method, we find out the risk level measured by equity beta mean in the insurance industry is acceptable, as it is little lower than (<) 1. Then, one of its major findings is the comparison between risk level of insurance industry during the financial crisis 2007-2009 compared to those in the post-low inflation time 2015-2017. In fact, the research findings show us market risk level during the post-low inflation time has increased much. Last but not least, comparing the market risk level in three (3) financial industries: insurance, stock and banking groups, we figure out that the risk level, measured by equity beta mean, in the insurance industry is still lower than that of banking industry, whereas the risk dispersion, measured by equity beta var, int he insurance industry is the highest among three groups. Finally, this paper provides some ideas that could provide companies and government more evidence in establishing their policies in governance. This is the complex task but the research results shows us warning that the market risk might be higher during the post-low inflation period 2015-2017. And our conclusion part will recommends some policies and plans to deal with it.


Research paper


Keywords: Risk management; Asset beta; Market risk; Financial crisis; Insurance industry; Macro policy


Reference to this paper should be made as follows: Ngoc Huy, D. T. (2019). The Measurement of the Volatility of Market Risk of Viet Nam Insurance Industry after the Low Inflation Period 2015-2017, Journal of Entrepreneurship, Business and Economics, 7(1), 153–173.

Published
Jul 22, 2019
How to Cite
NGOC HUY, Dinh Tran. The Measurement of the Volatility of Market Risk of Viet Nam Insurance Industry after the Low Inflation Period 2015-2017. Journal of Entrepreneurship, Business and Economics, [S.l.], v. 7, n. 1, p. 153-173, july 2019. ISSN 2345-4695. Available at: <http://scientificia.com/index.php/JEBE/article/view/111>. Date accessed: 19 jan. 2021.
Section
Articles