Prof. Kahane igniting the Economic Circle at the 2nd Global GameChangers Impact Lab, San Diego, June 2016
Yehuda Kahane (born August 4, 1944) is the 2011 recipient of the highly prestigious John S. Bickley Founder’s Award for his pioneering and lasting contribution to the theory, practice, and education of insurance and risk management (see sidebar).
Kahane is active in both the academic and business areas. He is a professor of insurance and finance, Faculty of Management, and Head of the Akirov Institute for Business and the Environment, Tel-Aviv University. He founded and served as dean of the first academic school of insurance in Israel (now a part of Netanya Academic College). At Tel Aviv University he directed the Erhard Insurance Center, the actuarial studies program, and coordinated the Executives Development Programs. He is a life and non-life actuary.
Since 1966, Kahane has taught at universities around the globe, including, the Wharton School of the University of Pennsylvania, the University of Texas at Austin, the Hebrew University of Jerusalem, the University of Florida, and the University of Toronto. He founded and directed the Israel CLU Program. He has organized and lectured in hundreds of seminars and conferences.
Kahane, the author of several books and numerous articles, was ranked among the most prolific researchers in insurance (JRI, June 1990). Risk Management for Enterprises and Individuals, 2009 (coauthored with E. Baranoff and P. Brockett, Flat World Knowledge) is becoming the leading textbook in the area.
His studies in risk management, and his practical business experience, led him to realize the importance and urgency of environmental risks issues. In the late 1960s, H. Levy and Kahane were among the pioneers who applied multiple regressions for insurance rate-making. In the early 1970s, he developed the concept of balancing assets and liabilities of financial intermediaries, in works that are still quoted 35 years later. These studies laid the foundations of theories of insurance rate making, solvency, insurance regulation, and to the vast area which is now known as ERM – Enterprise Risk Management. He has made major contributions to the theory and practice of loss reserving, agriculture and crop insurance, and the use of data mining in insurance.
In 1982, he consulted a project to increase food production in Latin American countries. The pivot to the plan was developing the then practically non-existiant agricultural reinsurance plans, that enabled to supply insurance protection for the farmers’ crops. The coverage was then used to guarantee the financing that was needed for acquiring better agricultural technologies. This helped to increase the agricultural reinsurance market from about $15 million to multiple billions, and at the same time to drastically increase the agricultural output of the entire continent, to better feed hundreds of millions people.
Kahane also has a rich entrepreneurial experience. He is a co-founder, director, and major shareholder in Ituran Location and Control (NASDAQ:ITRN). He was a co-initiator of the concept of “new” balanced pension funds in Israel, and was the co-founder and co-owner of the managing firm of the first fund (Teshura), that became the fourth largest fund in Israel. He is highly involved in the formation and management of start-up companies in a variety of advanced and high-tech areas, specializing in seed money investments. He owns the Weizman Hi-Tech Incubator, and is a co-owner of Capital Point Ltd. (traded on TASE) which owns Ofakim and Katzrin technological incubators. In addition he is involved in many voluntary NGOs activities (e.g., Chairman of the Association of Visually Impaired People in Sharon District, the PIBF – Palestinian International Business Forum, etc.).
He started his business career in a large multinational corporation, and in the management of various businesses. In addition he served as a consultant on risk management, insurance and actuarial and financial topics to the government, large organizations, and major companies both in Israel and internationally. Kahane has served on the Israeli Insurance Council and on several government committees on a variety of insurance topics.
Kahane earned a bachelor’s degree in economics and statistics in 1965, a master’s degree in business administration, cum laude, in 1967, and a PhD in finance in 1973, all from the Hebrew University of Jerusalem. He has served as an associate editor of the leading journals on risk and insurance. He has taught courses in technological forecasting (the first teacher of this subject in Israel), finance, insurance, risk management, and actuarial topics. His research focus is on the portfolio implications for insurance, rate-making, automobile insurance, natural hazards, pension and life insurance, reserving, and environmental risks.
Prof. Kahane’s activities have had a substantial impact on the insurance industry, both in Israel and globally.
His main contributions lie in the following areas:
- Pension Plans in Israel. He was involved in reforming the capital markets in Israel, which had a great impact on pension funds and providence funds. He was among the first to draw attention to the accumulating actuarial deficits of the pension funds, and to show ways to solve the problem. Following that, he was among the initiators of new non-union pension schemes for large segments of the population (e.g., for the members of the kibbutz movements). This led to the establishment of the new concept of “balanced pension funds.” Kahane was a co-founder and owner of the first managed balanced pension fund (“Teshura”) at the end of the 1980s (this fund became the fourth largest fund in Israel in 1995). The idea had been copied by other newly formed funds, and was adopted by the Commissioner of Insurance as the leading model for the post-1995 pension reform in Israel.
- Location and Prevention of Car Theft. He co-founded Ituran Location and Control, a firm that uses cellular communication technology to track any object (e.g., car) or person. Its products are used to prevent car theft and hijacking, and to locate people suffering from Alzheimer’s disease. The firm was established in 1995, and is now traded on the major list of Tel Aviv Stock Exchange, and on Nasdaq (ITRN). The system is used in Argentina, Brazil, Florida, and Israel, where it has been a major factor in fighting auto theft.
- No Fault Automobile Insurance. A driving force in the introduction of a pure no-fault automobile insurance system (for bodily injuries only) in Israel (1976), Kahane conducted the first feasibility study and the setting of the initial rate structure for this line of business, and provided counsel to a parliamentary committee that was studying the topic. Later, he was in charge of determining the loss reserves for this line by employing modern and sophisticated actuarial techniques that have been the key for setting no-fault automobile insurance rates in Israel for three decades.
- Natural Risks in Agriculture. He served as a consultant in a large project to increase food production in Latin America in the 1980s (in IICA Costa Rica, financed by the US AID). Part of the project involved insurance that enabled farmers to obtain financing for improved agricultural technologies. A key issue was to set up national agriculture insurance companies in most Latin American States, and to obtain reinsurance (at the undeveloped agriculture reinsurance market in those days). Besides its impact on food production, this led later to the development and growth of the world agriculture insurance and reinsurance markets. Through his activities at the PIBF (Palestinian International Business Forum) Kahane initiated the adoption of a similar approach for the Palestinian Authority, and this project is now in its implementation stages. He had a substantial impact on the setting of rates and terms of the insurance coverage for IFNRA (the Israeli Fund for Insurance of Nature Risks in Agriculture – now named “KANAT”) – for the entire agricultural sector in Israel – as a director for 10 years, and as a consulting actuary since then.
- His studies on portfolio approach for the balancing of assets and liabilities of financial intermediaries, set the foundations for the concept of ERM (Enterprise Risk Management).
- Shaping the Israel Social Security System. Kahane twice served as the chairman of strategic committees for the National Insurance Institute (Israel’s social security), which determined the financing of the social security system.
- Membership in National Committees.
- Israel Insurance Council (a statutory appointment)
- National committee on earthquake risks
- National pension policy committee (Shtessell Committee)
- Research and database committee for the prevention of traffic accidents.
- Committee on the status of the Israeli Social Security System (Brodet Committee)