Journal article
Foreign Currency Risk Management in the General Insurance Industry in Australia: A Survey
Journal of Economic and Social Policy, Vol.12(2), pp.83-92
2008
Abstract
This paper reports the findings of a survey of eighteen General Insurance companies and seven Reinsurance companies operating in Australia. Foreign currency transactions were reported by General insurance companies to represent less than 20% of their annual business turnover and by the majority of Reinsurers as representing between 20% and 39% of their annual turnover. A limited number of synthetic products were reportedly used to manage risk exposure on an ad hoc basis. Despite having a centralised approach to managing risk exposure there was no specific management strategy for dealing with foreign exchange risk. The conclusion being that centralised control does not always equate to an efficient management of foreign exchange risk. A further point of interest was that the magnitude of foreign exchange fluctuations, even with the transactions representing as little as 20% of turnover, could prove to be material when applying the Australian Accounting Standard AASB1031.
Details
- Title
- Foreign Currency Risk Management in the General Insurance Industry in Australia: A Survey
- Authors
- Gregory Laing (Author) - University of the Sunshine Coast - Faculty of Business
- Publication details
- Journal of Economic and Social Policy, Vol.12(2), pp.83-92
- Publisher
- Southern Cross University, Centre for Policy Research
- Date published
- 2008
- ISSN
- 1325-2224
- Copyright note
- Copyright © 2008 The Authors. Published version of this paper reproduced with the kind permission of the publisher.
- Organisation Unit
- University of the Sunshine Coast, Queensland
- Language
- English
- Record Identifier
- 99449776602621
- Output Type
- Journal article
Metrics
75 File views/ downloads
622 Record Views