transferring risk are being explored. The paper studies several recent transactions by USAA which use reinsurance capacity from … demonstrate that both features deviate from what theory would predict, yet are characteristic of many transactions, not simply …

with natural hazards, such as hurricanes and earthquakes. Risk management theory suggests protection by insurers and other … relatively little cat reinsurance against large events. We also find that premiums are high relative to expected losses …, especially after cat events. We then examine clinical evidence to understand why the theory fails. Specifically, we examine …

supply of intermediary capital is perfectly elastic. We take the US catastrophe reinsurance market as an example, using … results suggest that the price of reinsurance generally exceeds fair' values, particularly in the aftermath of large events …

consistent with the theory that financial constraints impede both financing and hedging …

risky investment, underwriting, reinsurance, and hedging; and ii) the allocation of risk across all of these opportunities …

distributed through the insurance and reinsurance systems. However, because insurance companies tend to share relatively small …

will be overstated, and the bias can be large (about 25 percent). Second, we argue that, according to finance theory, the …