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Journal of Management Research and Analysis


A study on financial risk assessment with special reference to IDBI Federal Life Insurance Company Ltd


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Author Details: Mohanamani P, Lakshmi Priya N

Volume : 3

Issue : 4

Online ISSN : 2394-2770

Print ISSN : 2394-2762

Article First Page : 176

Article End Page : 180


Abstract

In finance, risk is associated with the possibility of an adverse event that could cause a loss to the participants of the markets. Insurance industry because of its growing frequent uncertainty leads supervisors and companies to look for higher levels of safety through new approaches to solvency, supervision and Risk Management procedures. This complex scenario has made us an attempt to study the Financial Risk assessment in IDBI Federal Life Insurance. Time period of study is from March 2015 to Feb 2016 constituting 248 trading days. Among the funds available Nifty index fund and Equity growth fund is taken up for study and the required data is obtained from websites of NSE India and IDBI federal.  Sources VaR indicates the maximum loss which can incur on a particular time horizon with a defined level of confidence. Findings of the study reveal stock of HCL Technology, Tata Motors, Tech Mahindra Ltd, Kotak Mahindra Bank has high risk and low return.  Monte Carlo simulation and stress testing was also used to assess the financial risk of IDBI Federal Life Insurance.

Keywords:
Value at Risk, Monte Carlo simulation, Stress test, Hypothetical scenario

Doi No:-10.18231