In the recent times, there have been lot of deliberations on the credit crunch and its impact on global capital markets on the liquidity front. The market experts are analyzing the liquidity risks, assessing their magnitude and working on the solutions to measure and manage these risks, in order to avoid the significant market buoyancy and turmoil. Also, companies and Chief Risk Officers (CROs) are concerned with health risks of the employees who have been war veterans. A John Hopkins University study reveals that veterans of the 1991 Persian Gulf War may have an increased risk of lung cancer because of the war-related exposures to air pollution, vehicle exhaust and other combustible products. The study highlights that there are evidences that exposure to combustible products during the Gulf War could be associated with lung cancer in some veterans, and insurance firms have been involved in offering solutions for such exposures.

The five articles included in this issue give a wholesome idea of the trends in the areas of risk management and insurance. The first article, "Pricing Catastrophe Insurance Derivatives with Stochastic Interest Rates and Regime-Switching Jump Diffusion Losses", by Yang-Che Wu, Szu-Lang Liao and So-De Shyu, introduces a regime-switching jump diffusion model to capture the arrival and loss processes for catastrophic loss index. Based on this model, the catastrophe insurance derivatives like the PCS (Property Claim Services) futures call option, PCS futures call spread and the default-free catastrophe bond, can be easily priced.

The second article, "Insurance Policy Management Practices Using XML", by Padma Srinivasan and Sashi Kumar, deliberates on the policy management by policyholders, insurance companies and the insurance claims processors, using XML (Extensible Markup Language) in the process. XML is a text-based mark-up language that can be used to format data for storage or transmission between and along computer networks. The third article, "A Study of Market Potential of ING Vysya Life Insurance Company in Goa", by Shekhar V Sawant and Filipe Rodrigues e Melo, is about market potential for one of the private insurance companies—ING Vysya Life Insurance—and how the company has been continuously developing customer-oriented products and services, and is responsive towards the needs of the customers.

The fourth article, "Continuous Risk Improvement System: A Recipe of Success for the Insurance Agent", by Bani Kochar and Subhalaxmi Mohapatra, discusses a continuous risk improvement system that can help mitigate and control the risks in the best possible manner. This improvement system is based on the premise that "risks being an integral constituent of an insurance policy, there arises a need for a mechanism to assess and monitor these risks". The fifth and final article, "Potential for Life Insurance Companies in Indian Suburban Areas: A Special Case of Suburban Areas in Faridabad District", by Sonia Singh, argues that there is an immense potential for the insurance companies in suburban areas, most of which still remain untouched or unexplored by the insurance companies. For the insurance companies to be successful in these areas, they must design and provide attractive, innovative insurance products and services for the young employees as well as for the students relocating themselves for their education.

- Padma Srinivasan
Consulting Editor