The purpose of this paper is both to report on a new methodology in the field of automatic classification, and to discuss the need of these many techniques which are referred to as factor analysis.

Cross section regressions are used to evaluate the extent of economies of scale in the property-liability insurance industry prior to 1978 and to explain the increased number of mergers between 1978 and 1981 in the Quebec market. The second and third section of this paper discusses the...