In previous work, the current authors derived a mathematical expression for the optimal (or quot;saturationquot;) number of reinsurers for a given number of primary insurers (see Powers and Shubik, 2001). In the current paper, we show analytically that, for large numbers of primary insurers,...

Successful investment is the life-blood of any nation's life insurance industry. As such the industry relies heavily on well developed capital markets. In turn, a strong insurance industry can have a substantial and positive impact on capital market development. At the present time, China's...

This paper examines the relationship between mergers and acquisitions, efficiency, and scale economies in the U.S. life insurance industry. We estimate cost and revenue efficiency for life insurers representing 80 percent of industry assets over the period 1988-1995 using data envelopment...

This study further substantiates the presence of insurance underwriting cycles and analyzes their causes. A generalized least squares analysis of changes in premium levels is used to test the rational expectations/institutional intervention hypothesis across countries as well as within each...

The choice of insurance distribution system is examined from a transaction cost analysis perspective. Under independent agency, the agent's ownership of the customer list gives that agent incentives to perform some activities that would be more costly under a more vertically-integrated system....

In this paper we investigate the extent to which insurance companies utilize financial derivatives contracts in the management of risks. The data set we employ allows us to observe the universe of individual insurer transactions for a class of contracts, namely, those normally thought of as...

This paper develops a financial pricing model to determine prices by line of business in a multiple line insurer subject to default risk. The model implies that it is not appropriate to allocate equity capital by line; rather, the price in a given line depends upon the overall default risk of the...

This study analyzes the relation between fair values of equity and fixed maturity debt securities and share prices of property-liability insurers. We find that property- liability share prices can be explained by fair values of equity investments and U.S. Treasury investments, even after...

Property-liability insurance is distributed by independent agents, who represent several insurers, and exclusive agents, who represent only one insurer. The independent agency system is known to have higher costs than the exclusive agency system. The market imperfections hypothesis attributes...