This paper investigates the rationale for government intervention in the market for terrorism insurance, focusing on the externalities associated with self-protection. Self-protection by one target encourages terrorists to substitute towards less fortified targets. Investments in self-...

We review and extend the economic analysis of risk and uncertainty as it relates to behavior mitigating health shocks. We summarize some central aspects of the vast positive and normative literature on the role of various forms of insurance that attempt to smooth consumption, which can be uneven...

The Euler (or gradient) allocation technique defines a financial institution's marginal cost of a risk exposure via calculation of the gradient of a risk measure evaluated at the institution's current portfolio position. The technique, however, relies on an arbitrary selection of a risk measure....

We pursue two interrelated lines of thought. The first is a conceptual arc from (a) consideration of the unique characteristics of insurance risk, to (b) the quantification of this risk through risk measures, to (c) the application of these concepts to problems of allocating capital within an...

This paper studies the survival outcomes experienced over a 14-year period by a comprehensive sample of group-affiliated U.S. property-casualty insurance companies from 1994. While it is generally assumed that affiliate support enhances the financial strength of a subsidiary within a group, this...

This paper studies the influence of the legal environment and economic conditions on the form taken by life insurance company incorporations between 1900 and 1949. It identifies three key factors associated with mutual formation - low initial capital requirements for mutuals, regulatory...

This paper studies the connection between risk-sharing and organizational form. It models the organizational form decision as a trade-off between the superior capital market access of the stock form and a regulatory or agency advantage held by the mutual form. When capital is expensive,...

This paper studies the rise and fall of fraternal life insurance in the decades surrounding 1900. It shows that the rise of the fraternal life insurer took place while it was exempt from the solvency regulations that governed other insurance companies, and its fade into obscurity followed soon...

This paper studies the effects of company risk and guaranty funds on life insurance in force using company-by-state level data during the 1985-2010 period. Our primary objective is to use the variation in the timing of guaranty fund adoptions across states to identify the impact of public...

We study the association between banking crises and non-life insurance consumption using cross-country panel of data from 139 countries from 1988 to 2010. We find a persistent and excess decline in non-life insurance consumption after a banking crisis in the higher income countries. We explore...