Gründl, Helmut; Schmeiser, Hato - In: Journal of Risk & Insurance 74 (2007) 2, pp. 301-317
In their 2001 "Journal of Risk and Insurance" article, Stewart C. Myers and James A. Read Jr. propose to use a specific capital allocation method for pricing insurance contracts. We show that in their model framework no capital allocation to lines of business is needed for pricing insurance...