The Existence and Role of Indigenous Food Institution on Strengthening Foods Security of Rural Community

Local agricultural institutions as an important structure to support the food security system have been marginalized and replaced by formal social institutions that seem foreign to certain communities. This study aims to reveal and explain the existence and role of local agricultural institutions in strengthening the food security of rural communities on the island of Lombok. The research was designed with a qualitative research model. Data collection using several techniques, namely: in-depth interviews, direct observation and literature study. Data analysis used qualitative analysis with interactive models. Analyzes were carried out during data collection and after the end of data collection. The results showed the existence of agricultural institutions in rural areas of Lombok island based on: land control, production processes, provision / utilization of labor, irrigation, harvest and production sharing, storage and distribution of results, the roots of cultural values of the Sasak ethnic community which are the spirit of institutional development of food security are: a sense of togetherness, help to help, peace and peace of life, obedience and decency (the will to build self-image), and harmony in social and spiritual life. The roles and functions of local institutions for the Sasak ethnic community are: Regulating the system of division of labor, distribution of products and income, strengthening social cohesiveness, managing resources, strengthening social participation, building social harmony, and strengthening the food security system.

Introduction
In determining policies to prevent food insecurity and malnutrition, the government often generalizes macro problems into micro problems. Social aspects and local wisdom that develop in the community are not being paid attention to. Food security and nutritional security need to be built based on local resources (Stamoulis, 2001;Cook, 2002;Hamm & Bellows, 2003). Timmer (2004) argues that the most important challenge today for Indonesia's future food security is to restart rapid and pro-poor growth. An additional challenge to be faced is the "supermarket revolution", which is rapidly changing the basic structure of Indonesia's food marketing system. Horng & Tsai (2012) explains the need for food development based on local resources which means developing food diversification as a whole. For that, the community must start to be invited back to see local resources, cultivate them and promote them.
Local institutions, local culture and social kinship that have been pillars in creating community harmony really need to be revitalized again. At present, people increasingly do not believe in food and nutrition institutions based on local communities formed by the state during the New Order. Nurjaya & Nyoman (2007) revealed that local people actually have social capital which can be called local wisdom and traditional institutions in the field of food security and fulfillment of family nutrition. However, social capital and traditional institutions have been abandoned, whereas in many cases, the roles and functions of traditional institutions and social capital of local communities are able to provide solutions to various problems of rural poverty, including the problem of food insecurity.
The purpose of this research is to reveal various forms of local community-based institutions, both those that have been developing and those that are still developing, especially those related to food security, tracing the socio-cultural roots of local communities which are the normative spirit of developing local community institutions. related to food security, revealing and explaining the patterns, roles and functions of each element of the institutions of the local community in overcoming the problem of food insecurity

Methods
To achieve the stated goals, the research is designed in the form of qualitative research (Aminuddin, 2003) with a phenomenological paradigm (Taylor & Bogdan, 1984). Based on this technique, several data collection techniques were established, namely: semi-structured interviews, in-depth interviews, direct observations, literature studies and focuse group discussions (FGD) (Sutopo, 2003). In the context of this research, researchers or observers act as participants (Buford Junker in Moleong, 2004). In this study, tracing the validity of the data follows four criteria as proposed by Nasution (In Bafadal, 2003) and Moleong (2004), namely: Credibility, Transferability, Dependability and Confirmability.
Data analysis was carried out at two moments, namely (1) analysis during or simultaneously with data collection, and (2) analysis after data collection was completed. Analysis during data collection using a data reduction approach (Data Reduction). Moleong (2004), Bafadal (2003). Data collection during the collection took place following the procedure as proposed by Bogdan and Biklen (In Bafadal, 2003), namely: determining the focus of research, compiling preliminary findings, making plans for subsequent data collection, developing analytic questions, and setting data collection targets. Analyze the data after collection. The steps taken were: developing a system for coding categories, sorting data, presenting data and drawing conclusions.

Existence of Local Wisdom-Based Food Institutions
The Sasak people on the island of Lombok have a pattern of social relations characterized by a very strong kinship system. One indication is the development of a communal domicile pattern in rural areas, which is commonly known as hut gempeng (hometown) and in a wider orbit the concept of gumi paer (ancestral land) is known. Furthermore, in relation to the sociocultural setting of the Sasak people on the island of Lombok, the social values that are built up from the strong kinship system greatly affect the activities, structures, institutions and social processes that exist in Lombok society. With this social process, the community's life guidelines are strengthened and developed according to the rhythm of life and the characteristics of the environment even though it is limited to its territory (Wibowo et al, 1996). The following are the results of research on local institutions (Indigenous Institutions) related to agriculture and community food security systems that have been or are still developing on the island of Lombok, Indonesia:

Institutional Land Tenure and Production Process
The land tenure system on the island of Lombok cannot be separated from the power of the Balinese aristocracy Karang Asem which ended in 1894. According to Proreson Van Vollenhoven in Kraan Alfons VD (1956) it was revealed that before the arrival of the Balinese in Lombok there were only small political organizations that transcended village boundaries. , however, in the village there is a form of group which has formed itself, namely: (1) aristocracy The farming production sharing system, including maro, is still developing as a transaction instrument that is widely accepted by the farming community in Puloau Lombok, West Nusa Tenggara. Economically, the practice of the sakap system can be viewed as a distribution of resources that can have an impact on equal distribution of job opportunities and equal distribution of results and income. This means that a number of people who have an agrarian orientation and are part of the farming community but do not own land, then with this system there are still opportunities to work which can ensure food security for their families. A former landlord community leader in Sukamulia Subdistrict, East Lombok Regency, expressed his opinion that: "The sakap system is indirectly a way of sharing sustenance among others, namely the sharing of agricultural production. Many farmers do not own land, but are able to support their families because they are actors in the profit-sharing system of land owned by other people who have large tracts of land. The term is, with one plate there are two or more people who can eat from the same plate ".
It seems that the spirit of the profit sharing system or the sakap system originated from the land tenure system in the era of Aristocratic rule in the past. People from the upper class (aristocrats) who have access to land resources generally release their land to be cultivated by others, while they just wait for the portion of the produce delivered by the cultivator. Based on the process that takes place in the sakap system as described above, it shows that the agricultural institutional system plays a very important role in the distribution of agricultural products and the distribution of farmers' income. It is this aspect of the distribution of results that directly helps strengthen the food security system of rural communities in the Indonesian island of Lombok to date.
Pawn systems, leases and the like. Agricultural production-sharing institutions that are still developing on the island of Lombok, Indonesia are the pawn system and the rental system. This system is quite developed in Indonesia, not only regarding land tenure, but also the transfer of control over productive assets or other valuables. Unlike the sakap system, the practice of pawning tends to be more driven by the interests of the land owner. Thus, the bargaining position of land owners tends to be weaker than that of pawn recipients. Each land owner can mortgage his land at a certain value as offered by the recipient of the pledge. Therefore, from In the rental system, the bargaining position of land owners and tenants is relatively balanced. Therefore, the rental value of an area of land with a certain class generally has a mutually agreed upon local standard. This system is more directed at meeting the needs of the owner or lessee which is temporary in nature. Farmers on the island of Lombok view the rental or pawning system as an ordinary form of exchange. A person can work on someone else's land simply because the cultivator has a number of resources (money or other service goods) in exchange for the opportunity to cultivate the land for a certain period of time. Based on the process that takes place in the pawning system and the rental system as described above, it shows that the agricultural institutional system plays a very important role in the distribution of agricultural products and the distribution of farmers' income. It is this aspect of yield distribution that directly affects the food security system of rural communities on the island of Lombok, Indonesia.
Annual Land Lease (Naun). Basically this system is another form of rental system. The specifics are: the process of renting land by other people only takes the rainy season (wet month) which in the Sasak language is known as ketaun. So naun or buy taun is taken from the word ketaun which means the rainy season. So, cultivating farmers who only work on the land between the rainy seasons, while the dry season is returned to the land owner. In relation to the development of local institutions, Lombok local farmers are very familiar with the terms selling and buying years. Similar to the system of pawning, rent and the like, this institutional pattern does not directly affect the community's food security system. During its development, it was found in the West Lombok area, that taun buying was meant as a kind of rent for one year. For such an embodiment, it is clear that it is no different from the real meaning of rent. The existence of this annual land lease practice also illustrates the distribution of resource use or agricultural production factors which is one of the processes in the community food security system in rural Lombok Island.
The Right to Cultivate Land for Free (Nyempe 'or Ngingon), is a term for farmers in several areas on the island of Lombok which refers to the granting of rights to cultivate a small portion of land area for free. A relatively large land owner, out of compassion or other social interest, gives people who are deemed less capable of cultivating (utilizing) a small portion of their land. All financing and production results are fully covered and owned by the cultivator (Penyempe '). As a reward, usually "penyempe" takes part in maintaining the farm that is cultivated by the land owner, and is always willing if at any time his energy is needed by the land owner.
Ngingon (this term is better known in the northern part of Lombok) which means "to guard". This ngingon practice is more developed for dry land. In practice: people who receive ingonan (called pengingon) are given the right to utilize (cultivate) other people's dry land, usually among the main crops (main crops) cultivated by the landowner. Pengingon is obliged to take part in guarding (maintaining) and caring for their dry land. Meanwhile, the products from the ingonan plants are not required to hand over to the land owner. Usually, pengingons use the intercropping land with food crops (seasonal crops) as a source of carbohydrates, while the main crops of landowners are usually perennials and other plantation crops.
According to the accounts of a number of informants, in the past ngingon was synonymous with nyakap for dry land, so that in a number of villages, the pengingon was also known as the pengingon. Judging from the distribution aspect of land use and production, this regulation is considered to be closely related to the community's food security system. The indications are: (1) with a higher intensity of land use and increased production of foodstuffs, (2) utilization of production products is generally accepted directly by small farmers who do not have access to land resources. Thus, this system has a clear impact on community food security, in the realm of local food supply. The practice of granting rights to work by land owners to certain farmers also illustrates the distribution of resource use or agricultural production factors, and this is what supports the food security of the people in rural Lombok Island.

Institutions in the Provision / Utilization of Manpower
Based on the identification results of various local institutions in the agricultural sector, a number of institutions related to labor supply were obtained. The institutions for the provision of manpower that were also still developing in Lombok include: Mutual Assistance for Agricultural Workers (Besiru). Besiru or besesiru or besiru bales, is a local institution on the island of Lombok which deals with the provision of labor. In terms of language, the verb besiru is the active form of the word siru, which means mutually. That is, mutual assistance, mutual support or mutual support which is based on the spirit and understanding that life requires interaction and sharing with others (Mahyuni, 2009). In its most common implementation, Besiru is mutual assistance or mutual support of workers in doing something, especially agricultural activities by a group of people. Besiru is synonymous with arisan working in agriculture during the ongoing planting season. All informants said that in the past, besiru institutions grew and developed in the rural areas of the island of Lombok. At the beginning of the planting season, usually the besiru system tillage begins to actively carry out its role. Each farmer who belongs to the besiru group jointly helps cultivate the land of certain farmers who are members of the besiru group. Farmers who have a chance to go wrong only bear food which is called ngibukang. On another occasion, members of the Besiru group will work on other farmers' lands, and so on until all of the land of the Besiru members have been processed. Sometimes besiru is also applied to other jobs, such as weeding, harvesting and others. However, as said by the informants, the most common erosures are for land cultivation activities. The principle of joint responsibility or the burden of being shared is highly enforced in erroneous activities.
The development of large agricultural social institutions is motivated by the need for labor which is quite large and the costs are quite expensive. Besiru has economic benefits as an efficient use of costs, especially labor costs for agricultural activities. By making it possible for the member's agricultural land to be managed optimally in each growing season. Thus, these besiru institutions have a relationship with the community's food security system, because the main objective of institutional development is to increase the planting area and ultimately increase overall production.
Land Processing with Livestock (Ngaro). In general, the Sasak people of Lombok Island interpret ngaro as an activity to cultivate rice, especially during the rainy season. However, in fact ngaro (according to a konci informant in Sengkol Village) is an activity of cultivating the land using livestock (buffalo) by herding a group of buffalo tied to one another. The land to be processed first is diary (soaked in water at least one day and night). Stepping on the feet of a group of buffalo will automatically turn and destroy the ground until it is crushed, crumbly and can be planted with rice. In the past, agriculture in southern Lombok could not be separated from buffalo farming. That is why there are many farmers in this area who raise buffalo. Now the Ngaro institutions have not developed at all. According to a number of farmer leaders, the ngaro system has begun to diminish and become lost since the Bimas program began in the seventies. Cultivation activities began to be replaced with a system of plows and hoes.
In the Ngaro system there are principles of cooperation and social solidarity. This is because buffalo owners always combine their buffalo to work on the owner's land in rotation. There are times when the buffalo used by Ngaro is rented by the land owner to the buffalo owner, but in the past it was mostly done on the basis of cooperation such as mistaking for bales. Farmers in certain areas admit that this local agricultural system is very helpful for farmers in overcoming difficulties in cultivating labor. Therefore, the ngaro system that once developed on the island of Lombok has contributed to food security in the past.
Loose Wage System and Wholesale System. The daily wage system and piece system are the most developed ways of using labor in agriculture to date. The reduced role of the besiru and ngaro systems has actually been replaced by the wage system (daily an d wholesale). This system places most of the stages of agricultural activity as a market that provides opportunities for labor cost transactions. This system has directly replaced the role of social solidarity with materialistic interests. Therefore, the development of this wage system has directly paralyzed social institutions based on kinship and social solidarity.
From an economic perspective, this labor wage system is actually a form of income distribution in rural areas. With the development of the wage system, agricultural workers have a better bargaining position and have the opportunity to enjoy the results of their labor expenditure, even though within subsistence limits. In a number of villages, the daily wage system tends to decrease and is replaced by a piece system. In the wholesale system, there is a group of farm workers who ask or are asked to work in certain farming activities, such as cultivating the land, planting, weeding or harvesting. For cultivation, weeding and planting, the wage value is determined based on the area of land to be worked on. Wage transactions are usually based on the area of farm land. Meanwhile, for harvests using the threshing system (ngerampek), wages are determined based on the quantity of work produced. These various wage systems seem to strengthen the position of agricultural laborers, so that even distribution of income as the basis for food security can be guaranteed within certain limits.

Irrigation Institutions
Local institutions in the field of irrigation that have existed on the island of Lombok are Subak. Similar to Bali, subak is a farmer institutional system in terms of agricultural irrigation. Water is considered an important resource in agriculture and its availability is limited so that it needs to be regulated in order to have a better effect on agricultural output. Each subak has a working area (service area) which is known as kesubakan. Even in the past, this fertility became a recognized feature / location of land and was recorded in the ownership mark called pipil. Each sub-district is led by Pekasih or some kind of irrigation agent. It is this pekasih that regulates everything related to the distribution of water.
Judging from the organization, the local institution that has a clear governance system is the subak. Subak membership is registered with Pekasih and Sedahan (land tax collectors). Each member of the subak has clear and defined rights and obligations with the subak member. Their main right is to get irrigation services as needed. The obligation is to pay water fees to Pekasih, known as Suwinih. Later, with the formalization of a number of rural institutions including subak, the suwinih was then converted into an IPAIR (water use fee) managed by the P3A (Water User Farmers Association) which is a subak institutional transformation. The existence of local institutions in irrigation management in turn supported the food security system of rural communities on the island of Lombok before the development of agricultural intensification. Bederep. Based on the meaning of community leaders in general, bederep has a meaning that is identical to labor in agriculture. But the most popular, bederep is intended for harvest labor activities which in Sasak language is called mataq. The term bederep is more commonly referred to as harvest laborers where harvest laborers come from outside the village. These harvest workers are often called Penderep. Penderep usually comes to a village looking for harvest wages (mataq wages) which is usually done on a profit-sharing basis (bawon). The term bederep applies when the harvest is done by means of mataq for head rice. Penderep come to a village with a harvesting tool called rangkap (rice stalk cutting tool).

Harvest and Production Sharing Institutions
With regard to harvesting, a system for the results of the harvest between the harvester (penderep) and the land owner was developed, known as Nyolas (eleven). Nyolas is a production sharing system for harvesting activities, where for every eleven parts of the harvest, ten shares for the land owner, and one part for harvest workers (penderep). So for each harvest as many as eleven bunches, then one bunch is the wages given to the harvest laborers. The bederep model developed in the past is considered to be very helpful for the livelihoods of landless farmer families (farm laborers). Because with bederep there is an opportunity for them to get harvest jobs in a number of villages, from these activities they can get a certain amount of rice.
Ngunuh / Mepes. Ngunuh is an activity to take leftover rice from the rice fields after being harvested. In the past, when there was a traditional harvest system there was a habit of people who could not afford to take the leftovers of the rice fruit from the plant. Sometimes the harvest workers (penderep) do not harvest all the plants, but leave the parts that are considered to be not good, such as young fruit or stalks, damaged, empty and the like. By poor communities, the remains are harvested after the official harvest is deemed complete. Sometimes the owner of the rice fields asked the harvesters not to harvest bad products in the hope that the killers could take them. This is intended so that there is a share that can be enjoyed by people other than penderep. The results obtained by the killer are not too much, but usually these results can help improve family food security within certain limits. The term ngunuh developed when the head rice harvesting system was still ongoing.
After the introduction of new (superior) varieties whose harvest is carried out by means of a sickle and shattered to take grain or grain, the ngunuh habit diminishes and in some places the name changes to the term mepes. The principle of mepes is the same as ngunuh, which is to take the remaining portion that has not been harvested. Therefore, the habit of mepes seems to be growing, and there are even groups that travel from one village to another looking for mepes locations. Usually the mepes actors are the family of farm workers who do not have a job. Farmers on the island of Lombok admit that the activity of taking the leftovers of the harvest is very helpful for farm worker families to overcome family food problems on a limited scale. Thus, these local institutions also contributed to food security in the past.

Food Storage and Security Institution
Carefully investigations have been carried out regarding community food security and storage institutions on the island of Lombok, both those that developed in the past and those that are still developing today. The following describes several institutions aimed at ensuring food security for families and communities in the past and even today. Almost all villages on the island of Lombok in the past had village food barns which functioned as a place to store rice belonging to the village community for various purposes according to the agreement of the community members. In a number of villages on the island of Lombok, the food barn is synonymous with Banjar Pare (rice association). There were differences in the management and use of village granaries between various villages in the past. The differences in management methods involve the limitation of the amount of community contributions / contributions to the village barn, the method of borrowing by the community and the charging system. The following is an example of this difference according to the narrative of an informant from the village of Denggen, East Lombok: "In the past, every harvest season landowners were required to hand over rice to the village barn, each in a segment (4 bunches or 2 Cekel). Land owners whose land is less than one hectare are charged a fee of one Cekel (2 bunches) to be kept in the village barn. When the dry season arrives, the rice in the village barn is distributed to the poor, especially those who do not have a family barn. If there is no famine, farmers can borrow the rice from the village barn to be used as seeds and must be returned after harvesting, as much as borrowed and added with new fees ... and so on, so that the village granary at that time was really useful to ensure the safety of the residents' food. villagers" A simpler form of this food security institution is the group barn or better known as the banjar. This form is a group usually with a communal living approach called a hut. So another term for this lumbung banjar is lumbung hut (village barn). The management and utilization model of this lumbung banjar / hut is relatively the same as the village barn, only with a more limited scope. Besides that, it is also known as the family barn (Geleng Keluarga). Almost all households in the past had rice storage areas. There are two forms of the family barn, namely: the family barn, which has a larger capacity, is usually owned by a relatively large land-owning family and this is what is commonly called geleng (lumbung). Other forms are smaller ones, have less capacity and are usually owned by underprivileged families, workers or agricultural laborers. This small granary form is commonly called a pantek.
It is also said that in the past (sixty to seventies era) there were restrictions on the intensity of rice harvesting from the village barn, group barn or family barn. Harvesting or unloading (metun pare) of rice from the barn is only permitted once a week in a fixed number of bundles of rice and must be in an odd count (for example 3 bunches, 7 Cekel and the like). This shows that the community must be aware of and willing to apply the principle of frugality in economic expenditure, so that the careful calculation of rice harvest will be sufficient for one week. This accuracy clearly means efficiency so that how much is taken by a particular family and how much is available is automatically recognized by the other community.
Based on the explanation above, it is very clear how central the role of the village barn, granary and family barn is in maintaining food security and meeting people's food needs. However, as stated by Dharmawan et al. (2006), the role of local food institutions in the food security infrastructure system has been replaced by formal institutions which are often not only foreign, but also encounter many obstacles in their operations. This opinion is in line with the assessment of a number of informants, that nowadays the values of togetherness, kinship and affection have faded and are replaced by economic values, material and financial benefits so that mutual cooperation and the like have experienced a significant reduction.
Bedea (Barter System). Bedea is a form of exchange with the in-kind barter system. This institution developed long ago and is still found in several places today. In practice, the pendea (bedea people) usually come from outside the village or outside the village around carrying certain goods, non-rice agricultural products, etc. Then they come to certain houses and offer exchanges to the house owners. The exchange that the pendea needs from the host is rice or similar staples. For example: a pendea asks the host to accept the vegetables and the like that is brought and then asks for an unspecified amount of rice (depending on the giver's sincerity). One of the informants said: "In the past, the traveling bedea began to get busy when the dry season arrived, and decreased shortly after the working season (the rainy season) arrived. In terms of benefits, it is clearly a form of food distribution system and supports the community's food security system. It's just that in previous experiences, the status of pendea is often degraded by the community even as being equal with beggars.
However, if there are difficulties in employment and sources of income in rural areas, the practice of bedea appears again, even now the goal is urban areas. Thus, the Bedea is institutionalized as a traditional system of food security and distribution. This is in line with the opinion of Sukesi (2006) which states that in a traditional order, people have local institutions that regulate food security according to their needs.
Zakat (jekat). Ainunnajib, MH (1996) stated that in an atmosphere of social change filled with technology, the echo of zakat, especially in agriculture, is fading. It is revealed from the research results that in the past when the type of rice planted was head rice (tie rice), most farmers always set aside their harvest to pay zakat. The amount is 5 percent of the harvest after cutting the bawon (sharing the harvest with laborers or with the pengakap). One informant in Central Lombok revealed that after harvesting, before the bundled rice was piled (nungkep), 5 bundles of the harvest had to be set aside for the payment of zakat and 2.5 bunches set aside for suwinih (subak fee). The rice owner usually determines himself who will be given zakat from the harvest. While suwinih is given to pekasih (irrigation interpreter / head of subak).
Judging from its substance, it is clear that zakat is a very good distribution system of results and because it is given to poor people and the like, it is clear that this is one of the wisdoms in supporting food security and security in a fair manner. It was admitted by all informants that in the past, there were rarely farmers who did not pay zakat, because there was a belief that if zakat was not paid the yields were not blessed (quickly used up, less useful and the like). The current conditions are somewhat different, since the unhulled rice system developed, the granary does not function as a storage area and most of the grain is sold directly in the fields after harvest. Therefore, it is seldom known that farmers set aside their crops to pay zakat. The wisdom of the past has now diminished so that the strength that arises from the sense of community togetherness has also weakened and food security is largely determined by the market and the government.
Pinch. It is an activity to collect rice by means of pressing (painted with five fingers) or one tablespoon and a similar measure that is set aside by housewives every time they want to cook. The rice that is squeezed is stored in one can or box and at a certain time (for example one month) it is handed over to the association or banjar to then be distributed to the poor, or used for other purposes such as building places of worship and the like. In terms of its essence, this pinch is very useful as a means of food distribution so that it really supports the community's food security program.
There is still a tradition of jimpitan that is still developing today and cannot be seen as a mere social activity, but rather a form of articulation of mutual cooperation culture with the values of togetherness and compassion which is very possible to strengthen social solidarity in society. Dahrul & Marlianti (2006) argue that the presence of formal food institutions and food distribution mechanisms with a "market mechanism" pattern has marginalized the existence of "native food institutions" which have been supporting the community's food security system. To find out the socio-cultural roots of the local community which are used as the normative spirit of local institutional development in the field of food security, a study has been conducted through in-depth interviews and focus group discussions. The results showed that the development of a number of local institutions was always based on the Sasak community principle value system, namely overlapping. Descriptively the research results are presented as follows:

Togetherness / Solidarity (Desire to share)
The inherent value of togetherness in various activities of the life of the Sasak people, according to a number of community leaders, is caused by several things: (1) dependence among humans (2) a sense of fate and acceptance, and (3) a willingness to share. Interdependence between people, a sense of the same fate, and a willingness to do this are all solution steps in all problems or difficulties in life in the past. A sense of common fate, for example, seems to have emerged as an icon of social solidarity in the past, especially for marginalized rural communities. One of the expressions (metaphors) of the Sasak people as a reflection of the same fate as a joint, among others (Mahyuni, 2009): Sejari-Jari'n bekerem rice, whose literal meaning is "whatever happens, the rice has been soaked" and the expression with anyong Jari sejukung, literally means "both destroyed / drowned in one boat". The metaphor indicates how the value of togetherness and solidarity is upheld in various social actions. This value is the main asset as stated by Dharmawan et al (2006): loss of social food institutional assets has very significant implications for the food security capacity of the community, especially for communities in isolated areas or households in the lowest social strata (poor) where access to food very bad With the value of togetherness and driven by other social and economic needs, an institution is built which is initiated and adhered to by the community in order to overcome various problems of life and to achieve social goals in general. Among the institutions whose substance and existence are determined by the value of togetherness, are: besiru, subak, food barn, jimpitan and others.

Compassion and Help (Desire to feel)
Love and help are actually the manifestation of moral values that exist in members of the social system. Help as a social value arises because there is a moral value in the form of compassion between members of the social system and fellow creatures of God's creation. Thus, helping out is a social moral value that has inspired many social institutions that have been born in rural areas. From the research results, it was found that most of the local social institutions were born from the social moral values of love and help. Among these institutions include: besiru, bederep, ngunuh, food barn (banjar pare), jimpitan and so on.
Besiru, Bederep, banjar pare and the like are expressions of the values of love and help. The value of love and help in the past is the frame of a social process that appears in various social events. In the communal context, these values are said to be very capable and effective in building togetherness and social solidarity. The phrase (metaphor): together with difficulty (equally difficult), together with joy (equally happy), together with good (equally good), together with pain (together in suffering) which means together in joy and sorrow is a description of how The value of compassion and help has built into the attitudes and views of the Sasak people in living communal life in the past, so this is what underlies the emergence of a number of social institutions related to agriculture and food security.

Calm and Peace
In addition to basic social values, it is found that many local institutions in the agricultural / rural sector are formed from the spirit of economic values (economic interests) solely for the growth of a sense of calm and peace in living life. That is, the development of these institutions is more stimulated by interests community economy, so as long as the economic interest is still felt, the institution can actually still exist.
Economic interests are also always connected with inner satisfaction, namely a sense of calm and peace. This value limits the will to want to be alone, greedy and win alone. Phrase (metaphor): Just an araq finger sangonte of worship "(Only if someone is a provision for worship). This expression shows how economic orientation is always linked with spiritual interests, and in this way they find a sense of security, calm and full of peace.
Rural institutions related to the division of labor and production (results) seem to always be based on the existence of economic interests or benefits for members of the community who are involved in these institutions. Among these institutions are: the sakap system, lease and pawning, taun buy, casual wages and the wholesale system, even including the subak. All informants and supervising experts who confirmed the basic value problem of the division of labor and production were of the opinion that the development of such an institution was more motivated by economic interests.

Harmony
Based on the research results, it is known that the Sasak people prioritize social harmony, so that in most of their actions they always prioritize this harmony value. Social harmony as a goal in every social interaction can be seen from the inspiration of an expression (sesenggak) of the Sasak people who say "mpak smell, aik meneng, tunjung tilah" (fish are obtained, water remains clear, and the lotus tree remains intact). Its meaning freely is: goals are achieved, social harmony is maintained, and the environment is maintained. This expression is seen as a philosophy of life for the Sasak people that contain values of struggle, harmony and harmony with nature. Based on the results of identification and context analysis, it is known that a number of institutions are mainly built and developed from the existence of the values of harmony and harmony, namely: bederep, subak, food storage, zakat and others.

Obedience and Compliance
Another noble value which is also the spirit of the growth and development of local institutions in the past is "compliance and propriety". Obedience refers more to the concept of a transcendent relationship between humans and God. In other words, this obedience is closer to the meaning of devotion or obedience to carry out religious orders. Thus, obedience in society's assessment is the context of human relations with God which is directed by religious regulations (Fiqh) to be able to worship as well as possible, while 'appropriateness' is the context of human relationships with fellow humans or other God's creatures as shown by attitudes and actions (morals) in society.
Based on the results of careful supervision, it turns out that there is only one institution related to agriculture and food security that is imbued with the values of compliance and propriety, namely Zakat. As stated by Ainunnajib in Akmaliyah (2017) that in fact zakat is a religious institution which is automatically a social institution. Outside the context of agriculture and food security, there are many social institutions that grow and develop the values of compliance and appropriateness, such as the yasinan group, the kelem group, the dhikr group and so on. The importance of zakat in terms of human welfare was stated by Abdullah & Suhaib, 2011 and the same thing was stated by Ibrahim (2015) that Zakat is a special obligation in releasing a portion of individual wealth for social good. Zakat has the potential for the welfare of the people if it is optimally empowered. Because, the sources of zakat that exist in Muslims are very many forms and the amount is also very large.


Interaction effects between dynamic hybrid products and traditional deferred annuities in the German life insurance market

Dynamic hybrid products emerged in 2007 and are now well established in the German life insurance market. In this article, we study interaction effects between dynamic hybrid products and traditional deferred annuity contracts, that are sold by the same insurance company. The key question we investigate is whether the presence of dynamic hybrid products has a negative effect on the payout of traditional insurance products. We do so by using data drawn from a Monte Carlo simulation that is based on a model presented in this article. These data reveal that dynamic hybrid products reduce the payment to policyholders of traditional deferred annuities via the channel of surplus participation.

Introduction
In 2007, the German insurance companies LV 1871 and Nürnberger introduced a new class of insurance products on the German life insurance market: dynamic hybrid products (DHPs). DHPs are insurance products that promise to combine the security of a traditional life insurance product with the upward potential of an equity fund. By 2013, more than 20 German insurers offered products classified as dynamic hybrids by Bohnert (2013). More recently, Hambardzumyan and Korn (2019) analyse DHP noting insurers' search for investment opportunities in a low interest rate environment, thus illustrating the relevance of the topic today. In an article published in the German journal Der Aktuar, Menzel (2008) raises the question of whether holders of conventional life insurance products, hereafter referred to as traditional deferred annuities (TDA), are worse off when their contractual partner sells DHP to other customers. He argues that DHP holders can be viewed as obtaining a receiver swaption from the TDA holders without paying for it. Consequently, Menzel expects reductions with respect to the surplus participation for the TDA holders. His point of view is not universally accepted. In the subsequent edition of the same journal, Siebert (2008) criticises Menzel for omitting a number of scenarios from his considerations that would mitigate if not reverse the interaction effects. In this paper, we shed light on the existence of interaction effects to the detriment of TDA holders and quantify them. To this end, we model an insurance company selling both TDA and DHP policies and compare different scenarios in a Monte Carlo simulation. The rest of the paper is structured as follows: a literature review is presented in Sect. 2. Section 3 provides some basic information about DHP and the interaction channel. The model framework of our anal-ysis and the numerical results are presented in Sects. 4 and 5, respectively. Section 6 concludes.

Literature review
The literature offers some qualitative analyses and descriptions as well as quantitative analyses through simulations studies. The functioning of a DHP as well as risks for insurers is explained by Bettels et al. (2011). The contribution by Gatzert and Schmeiser (2013) about new life insurance financial products helps to set DHP in a broader context. An overview of the German market of dynamic hybrid products as of 2013 is given by Bohnert (2013) who lists the main features of DHP sold by more than 20 German insurers. A model framework for a three-pot DHP is proposed by Kochanski and Karnarski (2011). The authors implement a partial internal model for the solvency capital requirements according to the European Solvency II directive. In a more recent article, Hambardzumyan and Korn (2019) solve the optimal portfolio problem related to a particular class of DHP. The question of possible interaction effects between DHP and TDA is raised by Menzel (2008) and Siebert (2008), both coming to different conclusions.  as well as  use Monte Carlo simulations to study interaction effects arising through the presence of DHP, effects that involve fair valuation, risk analysis, and the policyholders' willingness to pay. This paper contributes to the literature by continuing the investigation begun by Menzel (2008) and Siebert (2008) using a Monte Carlo simulation. Thus, we present insight on the mechanism and magnitude of the interaction effect between DHP and TDA. Our model framework is inspired by  and relies on elements proposed by Kochanski and Karnarski (2011). However, our model is more detailed when it comes to calculating the inflows to the PPR and the bonuses distributed to policyholders.

Insurance policies
We define a traditional deferred annuity as a textbook insurance policy that promises the policyholder a lump-sum payment at contract termination in case of survival in exchange for a single premium paid at contract start. 1 The lump-sum payment depends on the actuarial interest rate the insurer promises to the policyholder and the number of deaths among the policyholder cohort during the contract duration. A dynamic hybrid product is an insurance policy designed to combine potentially higher returns of investments in equity funds with a certain degree of security required by policyholders. This is achieved by a dynamic investment strategy that shifts money between different investment options. These "pots" are generally the insurer's policy reserve (PR) and one or two equity funds. The dynamic aspect of the product is its periodic monitoring  and reallocation between the pots. Ideally, the insurer invests the money in risky equity funds in order to generate higher returns and shifts money to the PR as soon as the guaranteed insurance benefit is endangered by an adverse market development, at which point the money is "parked" in the insurer's policy reserve, where the money of the TDA is invested. The term "parked" is chosen deliberately to emphasise that the money is taking shelter for a short term and only waiting to be reinvested in riskier assets in order to generate higher returns. A DHP could be structured as represented in Fig. 1. For this exemplary product, the policyholder's money is split and allocated to three pots: the insurer's PR, a guarantee fund (GF) with a downside protection that limits losses from 1 month to the next to λ% (e.g. through short-term put options on the assets the GF is based on), and an equity fund (EF) with no protection and without the hedging costs of the GF. A worst case scenario for the single DHP components from 1 month to the next is shown in Fig. 2.
The money allocated to the PR is subject to the actuarial interest rate i G . i G corresponds to the maximal interest rate allowed to discount future benefits of contracts stemming from a specific underwriting period. The insurer takes on the risk associated with the investment of the money-just as he does with the money of the TDA policyholders. However, the risk of investment in the GF and EF is borne by the DHP policyholders. Therefore, the worst case scenario for the money allocated to the GF is a loss of λ%, due to the downside protection. For the EF, the worst case scenario is a total loss of the money allocated to it. The upside of this arrangement is that the totality of profits goes to the policyholder in the event the two funds develop well.

The interaction channel
The German life insurance market is regulated in the interest of making it a safe investment for consumers. Art.5 §1 of the "Deckungsrückstellungsverordnung" (DeckRV) (Regulation on the Principles Underlying the Calculation of the Premium Reserve) requires the insurer to employ prudent estimates of death and interest rates as well as future costs, especially when calculating the PR; Art.138 of the "Versicherungsaufsichtsgesetz" (VAG) (Insurance Supervision Act) requires the insurer to set premiums sufficiently high to cover resulting liabilities. The so-called first-order calculation bases (FOCB), necessary to comply with Art.5 §1 DeckRV, include a safety margin (as opposed to the so-called second-order calculation bases (SOCB) which do not). In general, calculations based on the FOCB entail premiums for the single insurance policies that are higher than what is actually needed for the promised payout. Insurers are thus forced by law to have a surplus at the end of each year. Art.153 §1 "Versicherungsvertragsgesetz" (VVG) (Insurance Contract Act) grants policyholders a legal claim to surplus participation. This participation usually occurs in two ways: first, through direct credits, or second, through the so-called provision for premium refunds (PPR). Since direct credits played only a subordinate role when DHPs were introduced in 2007, 2 we focus on the PPR. The PPR is a liability item in the insurer's economic balance sheet conceived to smooth potential fluctuations in surpluses over the years. It does so by allowing different in-and outflows to it in the same year. For example, in years with lower surpluses, the outflows will generally be higher than the inflows and vice versa. 3 The inflows are thereby a function of the surpluses, and the outflows are the bonuses allocated to the policyholders. For the insurer, the PPR is a useful cushion in times of sinking long-term asset returns. In contrast to the PR, a liability item that grows with the actuarial interest rate i G , the PPR only grows with inflows stemming from surpluses. Therefore, the insurer has an interest in keeping as much as possible in the PPR when interest rates and profits decrease. However, the insurer is not allowed to stock money in the PPR infinitely. 4 Hence, bonuses are allocated to the policyholders, generally with a delay of a few years. The different approaches employed for distributing bonuses are described by Führer and Grimmer (2010, pp. 160-161). One option common for pension insurances with a single upfront premium is to treat the bonuses like additional single premiums the policyholder invests in new insurance policies with the same range of services and date of maturity as the original contract, thus increasing the policyholder's lump-sum payment at the end of contract. We use this way of allocating bonuses in our model framework. We now explain how the first interaction effect between TDA and DHP takes place when the insurer calculates the inflows to the PPR. The second interaction takes place when it determines the outflows from the PPR.

Inflows to the PPR
In general, four main sources of inflows to the PPR can be distinguished: the risk result, the interest surplus, the cost result, and the residual result. Simply put, the risk result derives from the deviation of the expected (assumed) mortality from the actual one and corresponds to the surpluses/losses caused by this deviation. The interest surplus emanates from the difference between the interest gains promised to the policyholders (the actuarial interest rate) and the insurer's actual investment profits. The cost result is the difference between expected and actual costs for the insurer and the residual value includes other parts of the insurer's economic activity (e.g. reinsurance). Table 1 shows the proportion of the different sources for the years 2005-2007 and 2016-2018 for German life insurers. For the sake of simplicity and since they constitute the lion's share of the total result, we assume that the inflows to the PPR are calculated based only on the risk result and the interest surplus. Arts.6 and 7 of the "Mindestzuführungsverordnung" (MindZV) (Minimum Allocation Decree) mandate which shares of the risk result and the interest surplus are to be allocated to the PPR. We will denote them as net risk result (NRR) and net interest surplus (NIS). The NRR is calculated separately for different subgroups of policyholders. No interaction between TDA and DHP takes place at this stage. What about the NIS? Let i G denote the actuarial interest rate, i lt A (i st A ) denote the returns on long-term (short-term) assets, A lt (A st ) the insurer's long-term investments (short-term investments), and PR TDA (PR DHP ) the part of the insurer's total PR destined for the TDA (DHP). The provisions of Art.6 MindZV about the NIS can be translated into the equation with α ∈ {0.9, 1} (see Sect. 4) and β := PR TDA +PR DHP Total liabilities the insurer's policy reserves divided by the insurer's total liabilities. Now, DHP sold by the insurer will directly influence PR DHP (if money is allocated from the GF and EF to the insurer's policy reserves) and indirectly affect α and β. Even if the direction is unknown at this point, it is clear that there will be some kind of effect on NIS. This is the first interaction effect.

Outflows from the PPR-distribution of profits to the policyholders
When calculating the outflows from the PPR for the current period, the insurer must take several legal constraints into account. These considerations will be translated into an algorithm in Sect. 4. For the time being, we assume that the total bonus sum Bonus total has already been calculated in the current period. To subsequently calculate the bonus shares going to the subgroups of policyholders, we follow the procedure described in Art.5 §2 c of a DHP called SIGGI sold by the German insurer Signal Iduna. 5 Thereby, the bonuses for each subgroup of policyholders correspond to the subgroup's share of the insurer's PR. For the bonuses going to the TDA policyholders, this yields Bonus TDA = Bonus total · PR TDA PR TDA + PR DHP . (2) Now an increase of PR DHP unequivocally entails a decrease of Bonus TDA . This constitutes the second interaction effect between TDA and DHP policies.

Model framework
In the following section, we describe the insurance company model. It is inspired by the model used by  and uses parts of the modelling strategies proposed by Kochanski and Karnarski (2011). Our contribution primarily lies in proposing algorithms for model inflows to the PPR and for the bonus distribution, two mechanisms not included in previous models but constituting the aforementioned interaction effect. The observed time periods will be t {0, ..., T }, T = 12 · n + 1, where n is the contract duration of the policies sold by the insurer. For our standard contract duration of 30 years, T = 361, giving one period for each month in the 30 years plus one for the initial values (t = 0) and one for the final values (t = 361). Let Y := {t = 12 · i|i {1, ..., n}} ⊂ {0, . . . , T } denote the set of end-of-year periods. This will come in handy since some variables change only at the end of a year. The balance sheet of the insurer is illustrated in Table 2.
On the asset side of the balance sheet, we have assets that are long-term investments A lt and others that are invested short term A st . We further see the items GF A and EF A standing for investment in the DHP's guarantee and equity funds. Since the policyholders bear the risk for the investment in the GF and EF, they are always equivalent to their counterparts on the liability side GF L and EF L . On the liability side, we find the insurer's policy reserves PR, split between those "belonging" to the two subgroups of policyholders. The provisions for premium refunds PPR and the equity capital EC complete the insurer's liabilities. The EC is artificially split into a  part that is invested in long-term assets (EC lt ) and a liquidity cushion (EC st ). Table 3 enumerates the variables used in the model. The number of living policyholders for j {TDA, DHP} is assumed to evolve in the following way: where l SOCB m are second-order calculation bases for the number of m year old men taken from the mortality table DAV2004R (without the security-margin imposed by law). 6 We assume that each policyholder buys only one contract. The number of expected living (i.e. the number used by the insurer in period t − 1 to calculate their policy reserves in period t) is assumed to evolve as follows: where l FOCB m are first-order calculation bases for the number of m-year-old men taken from the mortality table DAV2004R (with security margin). Note that we do not calculate this variable for DHP since we assume this product to pay a death benefit. 7 A measure closely connected to the calculation bases and used at later points is the so-called number of discounted living at age m D m . 8 It is defined as The TDA's "temporary final payout", assumed to occur as lump-sum payment LSP, is given by where SP denotes the single premium paid up front by policyholders, h the policyholder's age at the conclusion of contract, and n the contract duration in years. Note that, in general, LSP t denotes the expected payout at contract termination, disregarding bonus participation occurring after period t. It does not denote a payment occurring in period t. Let us now consider the development of the balance sheet items. The transition mechanism of the long-term assets is given by The short-term assets are calculated as the sum of the policy reserves and the equity capital invested short term. Since the short-term interest rate is zero, the development of short-term assets is given by 6 Note that since December 2012, pricing in Germany has not been allowed to be based on gender. The mortality table for men is used for illustration purpose. 7 Most DHP products on the German market include a death benefit for the policyholder that at least amounts to the account value of the DHP at the time of death (e.g. Genius (Württembergische), SIGGI (Signal Iduna), Garantierente Zukunft (Die Bayerische), Alfonds (Alte Leipziger)). Bohnert (2013) enumerates only three insurers that offered a "no death benefit" option in 2013. 8 See Ortmann (2009, p. 125).
The development of the PR is given through where multiplication with γ TDA t := L TDA t · (L TDA t−1 ) −1 reduces policy reserves to the amount needed to ensure payout for the remaining contracts. (Note that the risk result is taken into account in the bonus section and that for the DHP's funds in the policy reserve, deaths are taken into account in the management decision in Eq. (19).) If PR DHP t > 0, this liability item grows with the guaranteed interest rate i G . Thus, should funds be shifted back from the PR DHP to the GF or EF, more funds need to be shifted back than what was taken earlier. Hence, the insurer needs assets that may be liquidated when this reallocation occurs. To take this into account, a growth through interest gains of the PR DHP goes hand in hand with an equivalent decrease of EC st . Turning our attention to the development of EC st , note that for t Y , SP DHP the single premium paid by DHP policyholders, and x · SP DHP the guaranteed benefit at the end of the contract term of the DHP, the amount of short-term liquidity needed to cover the DHPs' interest gains is bound by the interest gains a single DHP policy would realise in the last year of contract term if all its funds were shifted to the insurer's policy reserve (in that event, the DHP would pay only its guaranteed benefit and the interest gains would be smaller than i G · x · SP DHP ) multiplied by the current number of DHP policies held by the insurer at the beginning of the previous year (L DHP t−12 ), giving the rough estimation of maximum liquidity needed For the sake of simplicity, we assume that the insurer makes its investment decisions at the beginning of each year and ensures that the liquidity cushion contains this amount.
If the insurer needs to add money to the liquidity buffer, it does so by liquidating long-term assets at a cost ≥ 0. If the buffer exceeds the needed amount, the surplus is invested in long-term assets. Furthermore, a dividend δ as percentage of the equity capital is paid out to the shareholders. The long-term assets are thus adjusted in each period t Y to The GF and EF are assumed to evolve following two GBMs, given by the stochastic differential equations for the GF and for the EF, with constant drift coefficient μ i , volatility coefficient σ i , two Wiener processes W i (t) with correlation ρ, and initial value S i (0) = 1, i {GF, EF}. Inspired by Kochanski and Karnarski (2011), the development of the GF and the EF is given by and where ν denotes a yearly management fee, λ denotes the maximum loss in per cent that the downside protection of the GF allows, and P CP t,1/12 is a parameter from the Black-Scholes formula for option pricing. 9 In a second step, the funds of the DHP are reallocated following a management decision M D (AV t , t) inspired by Kochanski and Karnarski (2011). We model a product that is monitored on a monthly basis. 10 The bonus the DHP holders are entitled to is added to the current account value (AV) of the DHP policies before funds are reallocated at the beginning of each period (note that Bonus DHP 9 See, for example, Hull (2003). We consider call options with a maturity of 1 month ( t =1/12) ] · (σ CP · 12 1 12 ) −1 and d 2 = d 1 − σ CP 12 1 12 . 10 Eighteen of the 21 insurers studied by Bohnert (2013) monitor their product on a monthly basis.
The once again aggregated values for PR, GF, and EF are G t is defined as the amount needed in period t to ensure the guaranteed benefit x ·SP DHP via the actuarial interest rate at contract termination Dividing by L DHP t in Eq. (18) and multiplying by L DHP t+1 in Eqs. (19), (20), and (21), we eliminate the death benefit paid out to deceased DHP policyholders. The development of the provision for premium refunds is given by The insurer's long-term equity capital is given by the residual value Below, special care is given to describing the modelling of inflows to the PPR and the bonus allocation mechanism, the stage of the interaction effect.

Inflows to the PPR
The inflows to the PPR are given by for t Y and are 0 for t / ∈ Y (see Art.3 §2 MindZV). The NIS is calculated every month based on the provisions of Art.6 §1 MindZV. Translated into our framework, the monthly NIS is given by for α {0.9, 1} (see Eq. (29)). β t denotes the weight of the policy reserves to the balance sheet total (= A lt + A st ) for the year y Y , where y is the next bigger (or equal) multiple of 12 of t, y := 12 · t/12 , defined as (1) < 0.
The risk result NRR is calculated at the end of the year for the TDA policyholders. According to Art.7 MindZV, the net risk result (NRR) of the TDA is given by for t Y and by NRR TDA t := 0 for all other t. In contrast, it is assumed that the DHP includes a death benefit amounting to its current account value and will consequently not generate any risk result. 12

Bonuses
We now consider the allocation of bonuses, the second core alteration our model introduces. We included an allocation algorithm we believe captures the essential features of real-world bonus allocation. It is based on the following considerations: German law clarifies that the money in the PPR can be used only for premium refunds 13 11 Even though most DHPs are monitored on a monthly basis, German law requires the NIS to be calculated on a yearly basis. See, for instance, the DHP SIGGI sold by Signal Iduna. See Art.5 §2, c) in the product description, available at https://www.signal-iduna.de/media/10612_2352007_Jan17.pdf (accessed: 26.04.2020). 12 As explained earlier, most DHP products on the German market include a death benefit for the policyholder. 13 See Art.140 §1 VAG, first sentence. and is very restrictive on exceptions. 14 Furthermore, the insurer is assumed to pursue three partially conflicting goals when allocating bonuses to the policyholders: For the sake of clarity, we introduce three variables a t , b t , c t that model the amount of bonus payments dictated by each of these three considerations. The allocation algorithm is given by a t can be thought of as a default bonus-allocation rule. Taking the minimum between a t and b t ensures that a sudden decline of inflows to the PPR only gradually translates into a decline in the bonuses paid. Taking the maximum between the latter and c t guarantees that the insurer will not be fined for violating the provisions concerning the legal maximum amount of the PPR. 15 We model bonus allocation as taking place at the beginning of each year. Therefore, the bonuses resulting from considerations in a year ending in t Y become apparent in period t + 1, t Y . For the three following considerations, define as the weight given to TDA and DHP policyholders for the bonus allocation. 16

Allocating bonuses to the policyholders who generated them
According to Art.153 §2 VVG, bonuses must be allocated to the policyholders who generated them. Thus, the insurer will adapt the bonuses in a given year to the inflow of surpluses generated by the policyholders' contracts d years earlier. Thereby, d, a positive integer, is a waiting time used to strike a balance between allocating bonuses to those who helped generate them and assuring that the PPR is not empty and thus unable to fulfil its smoothing function. In the years preceding year d, we assume that the yearly inflow to the PPR was PPR 0 d . These considerations are formally specified in Eq. (33), with j {TDA, DHP}.
Remember that the DHP includes a death benefit and therefore NRR DHP t := 0 for all t.

Smoothing bonus payments over time
The PPR is intended to smooth possible fluctuations of the surpluses, for example in years of exceptionally high (or low) death rates or unexpected interest rate chutes. With Eq. (34) and the minimum condition in Eq. (31), we make sure that a sudden decline of inflows to the PPR only gradually translates into a decline of bonuses allocated.

Awarding of bonuses
DHP policyholders obtain their bonus payment based on Eq. (18). For TDA policyholders, the bonus is treated as a single premium for a new TDA to the benefit of the policyholder who helped generate the bonus, thus increasing the "end-of-contract" lump-sum payment LSP t+1 . We assume the new contract's duration to be equal to the remaining duration of the policyholder's original policy. Therefore, Remember that LSP t describes a payment due at contract termination and not in period t. For the PR needed for the TDA policies, this entails

Input parameters
The input parameters for the model are displayed in Table 4 and are intended to represent a German life insurance company after the introduction of DHP in 2007. The maximum loss of the GF λ and the management fees ν are taken from Kochanski and Karnarski (2011) whose model of the DHP inspired us. The drift parameters μ GF , μ EF and the volatility parameters σ GF , σ EF are adaptations to the values proposed by Kochanski and Karnarski (2011), taking into account different long-term interest rates and differing levels of risk and upward potential for GF and EF. Taking two correlated GBMs instead of one is a deliberate decision that in our view is closer to the actual investment praxis. A robustness check is performed on this decision. The interest rates i lt A , i st A , and i G were chosen to match typical pre 2008 values. We want to stress that we assume constant interest rates and a normal yield curve. The constant interest rates (as opposed to stochastically modelled interest rates) are a modelling convenience. Since our main interest is the TDA's payout and the investments in the insurers' PR are assumed to be long term, we think that taking stochastic interest rates boils down to taking their long-term means. As for the inverted yield curve (i.e. for the case that i st A > i lt A ), we abstract from a scenario where TDA policyholders potentially profit from a reallocation of DHP funds into the insurer's policy reserves. However, since an inverted yield curve is an exceptional event that does not necessarily accompany a shift of DHP funds, we are confident that we capture the essential long-run dynamics despite leaving it out of the model. We model a homogeneous cohort of policyholders aged h = 37 at the conclusion of the contract. All products are bought for the same single premium SP = 100 and have the same contract duration n = 30. Like in , the guaranteed benefit of the DHP is equal to the single premium paid by policyholders. The ratio of DHP policies to TDA policies is 1/2 but is varied during our analysis. The equity capital (EC st 0 + EC lt 0 ) and the initial provision for premium refunds PPR 0 are 1.5% and 7.8% of the balance sum, respectively, thus matching the ratio over all German life insurers in 2007 according to the primary insurers' statistics by the Federal Financial Supervisory Authority ("Erstversicherungsstatistik 1.5% of liability sum Initial value of total equity capital der BaFin"). A yearly dividend δ is paid out to the shareholders. For simplicity, we assume the dividend to be equal to the long-term interest rate i lt A . The waiting time parameter d is set to 5. This reflects the insurer's choice to maximise the funds in the PPR. Furthermore, we decided to make the liquidation of long-term assets costly. The parameter makes this assumption explicit and is set to = 0.05.

Numerical results
This section presents the results obtained via our Monte Carlo simulation. We first illustrate the interaction mechanism using three exemplary paths from our simulation with standard parameters. Second, we discuss the influence of the initial number of DHP contracts N DHP 0 on the surplus participation of the TDA policyholders. Third, we provide some sensitivity analysis of our results by performing robustness checks on input parameters. An overview of some variables that are not core to our analysis is given in Table 6 in "Appendix". Figure 3 shows three developments in the account value of the DHP and its decomposition over time in three different scenarios: one scenario corresponds to the median account value of the DHP as well as a good and a bad scenario (corresponding to the paths closest to the 95% and 5% quantiles of the DHP's account value).
The starting allocation per individual contract in t = 0 is computed by the management decision function and given by PR DHP,Ind 0 = 0, GF Ind 0 = 55.4, and EF Ind 0 = 44.6. In subfigures (a) and (b) of Fig. 3, we see two scenarios in which the GF's and EF's development is good enough to sustain the DHP without funds being shifted to the insurer's PR. The payout of roughly 300 and 150 in the 95% quantile path and the median path, respectively, is not a brilliant performance compared to a payout of more than 250 (without surplus participation) for the TDA. However, given that, unlike the TDA the DHP contains a death benefit equal to the account value at the time of death, this extra guarantee needs to be taken into account when comparing product performance. This is beyond the scope of this article.
Shifting our attention to the in-and outflow to the PPR and thus to the stage of the interaction, Figs. 3, 4, and 5 show that the bonus payments vary significantly from the benchmark case if DHP funds are shifted to the insurer's policy reserves. In path (c), bonuses to TDA policyholders drop to a quarter of the benchmark bonus payments in the worst years and stay low as long as DHP funds remain in the PR. This is not compensated by the higher bonus payments occurring in years 5 and 13. The spike in year 5 (common to all paths) is caused by lower inflows to the PPR in the first five years. To avoid a PPR that is higher than the last five inflows to it (see Eq. (35)), the insurer has to pay out a bigger bonus than in the benchmark case. The spike in year 13 is caused by the sudden drop in PPR inflows in the same years, dramatically lowering the sum of the PPR inflows of the last five years. Again, the insurer awards a big bonus in order to keep the PPR below its legal cap. Note that the PPR inflows and the bonuses are below the benchmark value, even if no DHP funds are shifted to the PR. This phenomenon is readily explained by the lower interest gains caused by the presence of a buffer invested in short-term assets. Equation (26) shows that while in the benchmark case, A st = 0, the insurer's interest gains are smaller as soon as N DHP > 0 and therewith A st > 0. Of course, this crucially depends on the assumption i st and less so on the assumption that short-term interest is equal to zero, an assumption we make for the sake of simplicity. The presence of such a buffer is intended to capture what Bettels et al. (2011) call "liquidity risk" arising from DHP policies.
To what extent does the ratio of DHP to TDA policies drive results? We discuss this question not only for our standard parameter set but for two variations of it: one representing a wider profit margin for the enterprise (i lt A = 0.04, ceteris paribus), one representing lower interest rates, keeping the profit margin constant (i G = 0.009, i lt A = 0.014, ceteris paribus). In the following paragraphs, we measure the adverse effect on the TDA policyholders by the percentage loss of the bonus share BS of the final TDA payout so as to have an easily interpretable measure that is comparable across parameter specifications. This bonus share is the part of the final payout that comes from bonus payments reinvested in the insurer's policy reserve when taken where LSP n is the final LSP in the corresponding benchmark scenario (i.e. N DHP 0 = 0, all other input parameters being equal), SP is the single premium, D is the number of discounted living from Eq. (5), and h and n are the initial age of the policyholders and the contract duration, respectively. The percentage deviation of the bonus share for any given path is defined as One general insight is common to all the three scenarios: the higher the ratio of DHP to TDA policies, the higher the mean percentage loss of the bonus share (BS) and its variance, as shown in Fig. 6. The results are summarised in Table 5 as results of a regression of (BS) on N DHP 0 . 19 The results can be interpreted as follows: for our standard parameter set, an increase of N DHP 0 of 1000 (given N TDA 0 = 10, 000) reduces the bonus share by 1.143 percentage points as compared to N DHP 0 = 0. This effect is smaller for a bigger profit margin and bigger for lower interest rates. The variance of results increases in both cases, as indicated by the variance measure 1 − R 2 .
A higher profit margin mitigates the negative result for the TDA. In our simulation study, this can be traced back to PPR inflows and, consequently, bonus payments being much closer to their benchmark values. This in turn can be easily understood by noticing that short-term assets, stemming from DHP funds shifted to the insurer's PR and the liquidity buffer, are relatively less important for higher long-term interest rates when calculating the net interest surplus (see Eq. (26)). Lowering the guaranteed interest rate i G and the long-term interest rate i lt A drastically worsens the results for 19 The regression is performed on 10,000 observations each for N DHP 0 {1000, 3000, 5000, 7000} and 1 (non-stochastic) observation for N DHP 0 = 0. We removed eight insolvency cases that occurred for the standard parameter set and N DHP 0 = 7000 since our model does not include any emergency management decisions to prevent insolvency. Therefore, the results represent an upper bound. = 0). Moreover, a lower actuarial interest rate increases the amount needed in every period t to ensure the guaranteed benefit G t of the DHP (see Eq. (22)). This influences the management decision (see Eq. (19)) and makes shifts to the insurer's PR more likely and to occur earlier than in the other scenarios. More interaction effects lead to a stronger final effect on the TDA's surplus participation. On the one hand, this should not be taken as indicative of the current real-world situation. Indeed, these days, most insurers would be glad if they could earn 1.4% interest on safe long-term investments. Furthermore, the initial values of the PPR and equity capital were set to values typical for the pre-crisis period, further complicating a transfer of the results to the present day. On the other hand, the result should urge policymakers to investigate whether the adverse effects described in this paper may have gained momentum in recent years.
The results are robust to differences in the waiting time d, the liquidation cost parameter , the dividend parameter δ, and the management fees ν. If we model the DHP's GF and EF based on one geometric Brownian motion instead of two correlated GBM, we obtain a slightly lower mean (BS) and variance. Lowering the guaranteed benefit of the DHP to 90% instead of 100% of the single premium paid up-front as well as increasing the drift of the GF and EF mitigates the negative effects on (BS). In line with Bettels et al. (2011), increasing the volatility of the GF and EF exacerbates the effects on (BS) and thus increases the cost for the TDA. These last three results are consistent with the conclusion that negative interaction effects occur whenever the DHP's funds are shifted to the insurer's PR: while a lower guaranteed benefit as well as higher drifts of the funds lead to fewer instances of shifted funds, a higher volatility of the funds acts in the opposite direction. For more detail, the results of the robustness checks are displayed in Table 11 and illustrated in Fig. 7 in "Appendix".

Conclusion
This paper uses a Monte Carlo simulation to identify and quantify interaction effects between DHP and TDA policies that are detrimental to the bonus share of the latter. To do so, we model an insurance company with a detailed mechanism of surplus participation, reflecting the relevant German legal provisions and market conditions from 2007, the year DHPs were introduced in Germany. The results can be summarised by saying that losses occur when DHP funds are shifted to the insurer's policy reserve. The size of the losses depends on how often and how early these shifts occur. Given a market development that negatively affects the fund components of the DHP, low guaranteed interest rates and high guaranteed benefits favour frequent and early shifts of funds. For our standard parameter set, the results point to an additional mean loss of 1.1 percentage points of bonus share per each additional 1000 DHP policies sold (for a reference company selling 10,000 TDA). Our results support the argument made by Menzel (2008) and can be viewed as a situation where the DHP policyholders receive an option from the TDA policyholders without paying for it. Providing this option is costly for the TDA policyholders, even if the option is not exercised. The costs grow as soon as DHP funds are shifted.
Although the effect worsens for lower guaranteed interest rates, the results should not be directly extrapolated to the present day. A positive interest rate margin is rare these days, PPR and equity capital ratios are different, and there may have been product innovations since Kochanski and Karnarski (2011) proposed the DHP model upon which our simulation is based. Future research could focus on investigating, whether the interaction effect between TDA and DHP policies is relevant today and perhaps even exacerbated by current conditions. To do so, valuation reserves should be added to the model, since their realisation plays a bigger role in today's interest rate environment than it did in 2007. Furthermore, the DHP model may need to be adapted to product innovations. Another extension of our work would be to assess the change in shortfall risk stemming from the insurer's sale of DHP. To accomplish this, management algorithms defining emergency policies taken by the insurer should be added to the model. Last but not least, possible legal consequences of our findings should be evaluated more thoroughly: the core element of a dynamic hybrid products is its guaranteed benefit, making it a pension scheme rather than a speculative investment. The guaranteed benefit relies on the possibility of shifting the DHP's funds to the insurer's policy reserve. When this reallocation happens, TDA policyholders lose a part of their bonus share and the losses can be substantial. Whether these findings could influence portfolio transfers under §13 VAG or raise questions regarding the equal treatment of insured persons under §138 VAG should be the subject of further legal considerations. If legal problems arise from the sale of DHP, simply separating the investment would probably not resolve them. By jointly investing both portfolios, the interactions could be shifted to other entities such as funds. In any case, perhaps potential policyholders should be informed that the performance of a TDA they are considering buying depends on what other products their contracting partner sells.


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THE New Year's Honours List contains the names of the following men of science and others associated with scientific work: Baron: Sir Ernest Rutherford, chairman of the Advisory Council of the Committee of the Privy Council for Scientific and Industrial Research, and until recently president of the Royal Society. Baronets: Sir John Rose Bradford, president of the Royal College of Physicians; Sir Richard Gregory, editor of NATURE. K.C.B.: Dr. F. E. Smith, secretary to the Committee of the Privy Council for Scientific and Industrial Research. K.C.M.G.: Hon. Sir Walter Hartwell James, Chancellor of the University of Western Australia; Dr. A. W. Hill, Director of the Royal Botanic Gardens, Kew. Knights: Prof. C. R. Beazley, professor of medieval and modern history in the University of Birmingham; Mr. W. W. Hornell, Viee-Chancellor of Hong Kong University; Dr. E. G. Graham Little, member of Senate of the University of London since 1906; Dr. R. W. Livingstone, Vice-Chancellor of the Queen's University, Belfast. C.B.: Mr. R. L. Hobson, Keeper of Ceramics and Ethnography, British Museum. C.I.E.: Lieut.—Col. H. W. Acton, director of the School of Tropical Medicine and Hygiene, Calcutta. C.B.E.: Miss Caroline Haslett, director of the Electrical Association for Women and secretary of the Women's Engineering Society (Inc.); Miss Edith Helen Major, Mistress of Girton College, Cambridge; Miss Louisa Martindale, president of the Medical Women's Federation and vice-president of the Medical Women's International Association; Prof. Sidney Russ, professor of physics, Medical School, Middlesex Hospital, for work in connexion with radium; Mr. J. J. Shaw, secretary to the Seismological Investigations Committee of the British Association. O.B.E.: Dr. W. M. Aders, lately economic biologist, Zanzibar; Mr. R. S. Capon, Superintendent of Scientific Research, Royal Aircraft Establishment, Air Ministry; Mr. J. M. Carey, H.M. Divisional Inspector of Mines; Mr. J. S. Corbett, secretary of the Empire Forestry Association; Mr. A. de V. Wade, principal assistant in the Native Affairs Department, Kenya. M.B.E.: Dr. V. E. Wilkins, Assistant Principal, Ministry of Agriculture and Fisheries.

Smith+Nephew, the global medical technology business, announced the launch of CORI◊ handheld robotics, an advanced system for both total and partial knee arthroplasties.
The CORI system is a compact and fully mobile5 solution incorporating a 3-D intra-operative imaging system with an advanced robotic sculpting tool. The robotic system allows surgeons to measure, plan, and perform a knee surgery which is personalised to the patient's individual anatomy in theatre.
The Smith+Nephew system is considerably more compact than alternative robotic systems, has minimal set up time, and is so portable, it can be moved from theatre to theatre to optimise flow of patients through surgical units.
One of the first surgeons to use the device in the UK, Mr. Tim Parratt, Consultant Orthopaedic Surgeon at East Suffolk North Essex NHS Foundation Trust says, "The CORI system is excellent to use. This technology is mobile, portable and slots seamlessly into theatre. There is minimal disruption for the theatre staff. If anything, it's easier than getting a conventional kit ready. This system also allows me to tailor the operation to the patient's unique physiology, whereas with instruments I tended to perform the same operation every time on each patient." Patient Outcomes: Less pain, fewer revisions, and greater satisfaction post-surgery Over 680,000 people are currently waiting for a hip or knee replacement. Many of those have waited well over a year, living with chronic pain. More than 10 per cent of patients waiting for knee surgery in the UK say their quality of life is 'worse than death'.
The benefits of robotics-assisted surgery for patients are myriad and include significantly improved patient reported outcome measures (PROMs)9,10 † ‡ and shortened length of hospital stay11 ‡, there is evidence of an earlier return to an active lifestyle12 ‡.
Australia has been a leader in the field of robotics and navigation in orthopaedic surgery and the registry has demonstrated the benefits patients can expect such as fewer revisions and complications, and a shorter length of hospital stay with the patient able to be discharged in sub-24 hours. "The CORI system enables every patient to have a knee replacement that is shape matched and aligned to their specific anatomy. We know that outcomes aren't consistent in non-robotic surgeries and that one in five patients have issues following surgery. Our technology has evolved so that we can achieve a personalised fit to each individual patient," says Mr. Simon Tarry, Managing Director, UK, Ireland & Nordics, Smith+Nephew.

Innovation at Smith+Nephew
The CORI system is amongst the first technology to place the surgeon at the heart of the digital operating room. Surgeons can access the benefits of robotic surgery but still have full decision-making capability at each step of the operation.
This system is the first of several launches in technology and software over the next five years, demonstrating Smith+Nephew's commitment to improve surgical experience through digital and technology innovation across the patient pathway.
To learn more about Smith+Nephew's CORI surgical system please visit: www.robotics-surgery.com globe that have leveraged their core business strategies to drive positive social impact.

JOHNSON & JOHNSON
While the vaccine makers on last year's list were recognized for their unprecedented collaboration on fighting the coronavirus, this year's list highlights those that are helping expand access to COVID-19 vaccines around the world. Johnson & Johnson was honored to be included for its efforts to make available its Janssen COVID-19 vaccine, for which it received Emergency Use Authorization from the U.S. Food and Drug Administration in February.
To compile the prestigious list, Fortune evaluated companies on the impact they've made in addressing one or more of society's problems, the business results of those actions and the level of innovation involved. Also taken into consideration: how essential the company's initiative was to its overall business strategy.
A Commitment to Social Responsibility and Innovation: For more than a century, Johnson & Johnson has relied on a core set of values to guide every aspect of the way it does business.
When COVID-19 hit, the company was able to respond to the once-in-a-lifetime global health challenge by harnessing its capabilities, scientific expertise, global partnerships and experience in helping fight pandemics for over a century-and its 130,000-plus employees around the world mobilized with urgency to address the critical needs of families, communities and healthcare providers.
That sort of innovation and a commitment to social responsibility provide the foundation for Our Credo, the company's mission statement that compels everyone who works at Johnson & Johnson to put the needs and well-being of people who depend on its products and services first.

MÖLNLYCKE HEALTH CARE Granulox ® wins Prix Galien
Mölnlycke's haemoglobin spray Granulox ® has been awarded the prestigious Prix Galien for best new medical device in Belgium.
Granulox is Mölnlycke's innovative topical haemoglobin spray which facilitates oxygen diffusion for the treatment of chronic wounds, including diabetic foot ulcers, venous leg ulcers, and pressure ulcers.
When Granulox is sprayed on a wound, highly purified haemoglobin is released. This binds with oxygen from the environment and diffuses through the exudate to supply oxygen to the base of the wound, supporting wound healing and improving patient outcomes.
Studies report that using Granulox results in shorter healing time, reduced pain scores and total cost savings for healthcare providers compared to standard of care.
• Twice as many chronic wounds healed at 8-16 weeks compared to standard of care • Time to heal diabetic foot ulcers 50% shorter than with standard of care • Treatment costs in diabetic foot ulcers at least 40% lower than with standard of care • More than 70% of patients reported lower average pain scores at four weeks than with standard of care in chronic wounds • 99% less slough in chronic wounds after 4 weeks compared to 33% with standard of care The Prix Galien is an annual prize which recognizes innovative medical devices which improve the human condition. The awards were created in France in 1970 by pharmacist Roland Mehl, in honour of Galen, the father of medical science and modern pharmacology. Receiving a Prix Galien is the highest accolade for the world's most innovative medicines and devices and is considered the pharmaceutical and medical industry's equivalent of the Nobel prize.
In their summation, the Prix Galien jury highlighted Mölnlycke's impressive dossier, video and clinical results. They commented that Granulox is used to treat a condition which presents a significant patient burden. It improves quality of life and contributes to interdisciplinary care, which will be important for the healthcare system of the future. Some members of the jury even described it as 'ingenious'! CEO Zlatko Rihter says: 'We're extremely honoured that Granulox has been recognized by the Prix Galien committee. We're also humbled to be in such prestigious company alongside businesses like Siemens Healthineers, BeWell Industries, Norgine, and Sunrise. This wouldn't have been possible without our Belgian team and our Granulox team.' Rob Claypoole, EVP Global Wound Care said: 'At Mölnlycke, we've long been convinced of the power of Granulox, but that it has now been recognized by the Nobel Prize for medical devices is further proof of just how innovative a product it is. We look forward to helping even more peoplewhether patients, caregivers, or clinicians -see the difference topical oxygen therapy can make in wound care.' Sabrina Suetens, Mölnlycke Business Director for Wound Care & General Manager for Benelux commented, 'I'm so incredibly proud of the entire team, and we really appreciate this award. The greatest reward, however, is the opportunity to make a difference in chronic wound patients' lives with such an easy-to-use product.' *References: www.molnlycke.com/productssolutions/granulox/ 3M 3M and UN Climate Change to address climate challenges, drive collective solutions Starting at COP26, new partnership will advance the Paris Agreement and UN Sustainable Development Goals 3M will highlight the unique challenges and opportunities manufacturers face in combatting climate change in a candid conversation with global peers at the Conference of the Parties (COP26) on Wednesday, Nov. 10 from 2:00-3:30pm GMT. The event will take place within the United Nations Climate Change (UNFCCC) pavilion as part of its new strategic partnership with 3M. In addition to featuring insights from international sustainability leaders, the conversation will be moderated by Sally Uren, CEO of Forum of the Future, a leading international sustainability non-profit. The discussion will be available for live and post-event public viewing on UNFCCC's YouTube channel.
"Through our established commitments, global manufacturing footprint and technology solutions, 3M is helping to drive positive impact on climate changeimpact that we can further expand and amplify through connections at COP26 and our new partnership with UNFCCC," said Gayle Schueller, 3M Senior Vice President and Chief Sustainability Officer. "By working with the UNFCCC and across its partnership network, we can share our insights as well as our challenges, emphasizing there is no singular approach to addressing climate change and encouraging new peers to join us in working toward a more sustainable future." 3M will work with the UNFCCC and its partnership network to drive collective action on climate change, social and environmental responsibility, and the UN Sustainability Development Goals (SDGs). Following COP26, 3M and UNFCCC will collaborate on engagements at key global climate events for the next three years.
Earlier this year, 3M announced it plans to invest $1 billion over the next 20 years to accelerate its environmental goals, including new commitments to achieve carbon neutrality by 2050, reduce water use 25% by 2030, enhance the quality of water returned to the environment after use in manufacturing, and reduce use of virgin fossil-based plastic by 125 million pounds (nearly 56,700 metric tons) by 2025. To help advance these goals, 3M has set interim targets to reduce water use 10% by 2022 and 20% by 2025 and decrease its carbon emissions 50% by 2030 and 80% by 2040 (using 2019 as a baseline). 3M has a strong history of reducing greenhouse gas emissions, and recently achieved Scope 1 and 2 absolute emissions levels that are more than 70% below a 2002 baseline. While continuing to drive immediate progress on these and its other existing sustainability commitments, 3M looks to broaden its positive impact through cross-sector collaboration at COP26 and its partnership with UNFCCC.
For more information on 3M's ongoing efforts to improve the environment, visit 3M.com/sustainability.