Extreme Value Theory Approaches to Insurance in a Catastrophic Environment. Recent decades are marked by numerous significant natural (climate change) or man-made (financial crises) catastrophes, which have significantly altered the landscape of the insurance industry. These have potentially significant negative impacts on the availability and affordability of insurance, and hence on the capability and capacity of households and businesses to take risks and be competitive. This project endeavour ....Extreme Value Theory Approaches to Insurance in a Catastrophic Environment. Recent decades are marked by numerous significant natural (climate change) or man-made (financial crises) catastrophes, which have significantly altered the landscape of the insurance industry. These have potentially significant negative impacts on the availability and affordability of insurance, and hence on the capability and capacity of households and businesses to take risks and be competitive. This project endeavours to establish progressive approaches (using extreme value theory) to the challenges faced by insurance in such a catastrophic environment. They will enhance the financial stability and competitivity of the Australian economy, and further establish its global leadership in dealing with climate changes and catastrophes.Read moreRead less
Understanding and overcoming confusion in consumer financial decisions. This project aims to develop consumer-centred approaches to reducing the harmful effects of confusion in financial decisions by studying superannuation investment and home loan decisions where confused choices are individually and collectively costly. The project intends to develop comprehensive models to capture the full complexity of financial products and the diverse preferences and capability of consumers, then to use ad ....Understanding and overcoming confusion in consumer financial decisions. This project aims to develop consumer-centred approaches to reducing the harmful effects of confusion in financial decisions by studying superannuation investment and home loan decisions where confused choices are individually and collectively costly. The project intends to develop comprehensive models to capture the full complexity of financial products and the diverse preferences and capability of consumers, then to use advanced statistical methods to estimate the benefits of clearer decision-making. The outcomes of this project includes new models of complex financial decisions, and a better understanding of where confusion arises and the effects it may have. Decreased confusion will raise financial well-being and help communities become more resilient to financial shocks.Read moreRead less
Quantitative Analysis of Systemic Risk in Insurance. This project aims to achieve a contemporary and comprehensive quantitative analysis of systemic risk in insurance. The significance lies in narrowing the gap between the studies of systemic risk in banking and insurance. Expected outcomes include the construction of insurance/reinsurance networks to formalise systemic risk, the analysis of the role of network integration, and the development of pricing frameworks to entail a systemic risk prem ....Quantitative Analysis of Systemic Risk in Insurance. This project aims to achieve a contemporary and comprehensive quantitative analysis of systemic risk in insurance. The significance lies in narrowing the gap between the studies of systemic risk in banking and insurance. Expected outcomes include the construction of insurance/reinsurance networks to formalise systemic risk, the analysis of the role of network integration, and the development of pricing frameworks to entail a systemic risk premium. The project will benefit insurers and regulators by providing a forward-looking approach to monitoring and assessing insurance risk during a systemic crisis. These important original contributions to insurance risk management will help establish Australia’s global leadership in systemic risk.Read moreRead less
Forecasting and Financing Healthy Ageing and Aged Care in Australia. This project aims to quantify future risks of chronic illness and functional disability in retirement, proposing financing strategies aimed at enhancing healthy ageing, lifestyle quality and aged care provisions. The project devotes to devising a framework integrating government and private sector participation in funding health costs which increase significantly in older ages. The expected outcome includes sustainable retireme ....Forecasting and Financing Healthy Ageing and Aged Care in Australia. This project aims to quantify future risks of chronic illness and functional disability in retirement, proposing financing strategies aimed at enhancing healthy ageing, lifestyle quality and aged care provisions. The project devotes to devising a framework integrating government and private sector participation in funding health costs which increase significantly in older ages. The expected outcome includes sustainable retirement income scenarios for easing fiscal pressure from social initiatives such as age pension and aged care financing at the same time improving living standards for seniors. The project expects to place Australia at the forefront of research on sustainable solutions to financial challenges facing retirees.Read moreRead less
Shock model-based framework for modelling correlated large losses. This project aims to develop aggregate risk models by utilizing shock models in reliability theory. It intends to provide a new alternative approach which is more realistic and also mathematically tractable in order to estimate various types of quantities in (re)insurance and operational risk management. The expected outcome includes enhanced capacity by advanced analytical tools to assess correlated and large risks, thus assisti ....Shock model-based framework for modelling correlated large losses. This project aims to develop aggregate risk models by utilizing shock models in reliability theory. It intends to provide a new alternative approach which is more realistic and also mathematically tractable in order to estimate various types of quantities in (re)insurance and operational risk management. The expected outcome includes enhanced capacity by advanced analytical tools to assess correlated and large risks, thus assisting in the management of key risks and improving the effectiveness of risk management. This should benefit the stability of the financial and regulatory systems where large and dependent risks are concerned.Read moreRead less
Diversification failures and improved measures of uncertainty. The project aims to develop new statistical tools, applicable when the conventional paradigm that diversification reduces risk fails and when textbook approaches to risk quantification severely under-report risk. The new tools enhance our capacity to build and manage natural, social and human-made systems in uncertain environments. Our effective response to many threats including financial crises and natural events, depends on this c ....Diversification failures and improved measures of uncertainty. The project aims to develop new statistical tools, applicable when the conventional paradigm that diversification reduces risk fails and when textbook approaches to risk quantification severely under-report risk. The new tools enhance our capacity to build and manage natural, social and human-made systems in uncertain environments. Our effective response to many threats including financial crises and natural events, depends on this capacity. Thus, the expected benefits in the form of more reliable and robust risk analytics will accrue when they are most needed.Read moreRead less
Reaching for tax breaks: Household financial decisions and tax policy. The project aims to investigate how two tax incentives – franking credits and negative gearing of investments – impact individual taxpayer risk-taking behaviour, voluntary savings and retirement outcomes. The project will develop a new measure of tax efficiency based on if, and how, individuals take advantage of franking credits and negative gearing. It will identify what factors drive the use of franking credits and negativ ....Reaching for tax breaks: Household financial decisions and tax policy. The project aims to investigate how two tax incentives – franking credits and negative gearing of investments – impact individual taxpayer risk-taking behaviour, voluntary savings and retirement outcomes. The project will develop a new measure of tax efficiency based on if, and how, individuals take advantage of franking credits and negative gearing. It will identify what factors drive the use of franking credits and negative gearing and whether their use is associated with better retirement outcomes. The findings of the project will potentially lead to an improvement in individuals’ financial literacy, retirement outcomes and reduce reliance on the aged pension.Read moreRead less