This article investigates market discipline in the reinsurance market by examining the sensitivity of reinsurance … demand to reinsurer counterparty risk for a sample of US property-liability insurance companies. Using the financial strength … rating of reinsurers as a proxy for reinsurance counterparty risk, we find evidence of market discipline that reinsurance …

We analyze the relationship between insurers' liquidity creation and reinsurance demand. Early theoretical … to compensate clients at a low cost when unexpected claims happen. Unexpected claims can be protected by reinsurance …, which introduces a second trade-off between reinsurance demand and liquidity creation. This trade-off can be more important …

findings provide the first joint evidence that affiliated insurance companies have target leverage ratios and that ICM activity …

. This capital cost can be reduced by hedging longevity risk with longevity swaps, a form of reinsurance. We assess the costs …, rather than transferring this to the reinsurance or the capital markets. This aspect of the Solvency II capital requirements …

reinsurance, as a new endogenous decision variable, on this policy mix using simultaneous equations model. Empirical results … obtained from a sample of U.S. property-liability insurance firms reveal significant interactions between capital, risk, and … reinsurance. The relationship between risk and capital is positive, highlighting the effectiveness of regulatory mechanisms …

model. Relative to securitization, reinsurance features lower adverse selection costs because reinsurers possess superior … underwriting resources than ordinary capital market investors. Reinsurance premia, however, reflect markups over actuarially fair … reinsurance relative to securitization. In equilibrium, low risks are transferred via reinsurance, while intermediate and high …

Limited liability creates a conflict of interests between policyholders and shareholders of insurance companies. It … the value policyholders attach to and premiums they are willing to pay for insurance coverage. We characterize Pareto …

The drivers of financial success of the insurance industry are of interest to several players in any economy including …; most of which look at narrow elements that determine insurance companies’ performance. This article sought to explore the … components contributing to the financial performance of insurance firms. We employed a sample consisting of 37 general insurers …