Browse Research
Viewing 2651 to 2675 of 7690 results
2004
This paper demonstrates that the intuitively appealing argument based on the postulated trade-off between expected return, variance and skewness of return of a risk-averse gambler does not provide an explanation of observed betting behaviour.
2004
The puzzle of underwriting cycles and insurance crises in property-liability insurance has led to numerous economic hypotheses and analyses, yet no single theory seems capable of explaining all of its aspects. Reinsurance is hypothesized to be a potential factor in observed cycles in the primary market; despite this, few underwriting cycle studies focus on reinsurance.
2004
Proposed tort reforms have focused on punitive damages and noneconomic damages, each of which pose problems for jury decision making. The U.S. Supreme Court decision in State Farm v. Campbell will greatly limit very large punitive damages awards, and will affect smaller punitive awards to a lesser degree. Noneconomic damages caps enacted by state legislatures have greatly enhanced insurance market performance.
2004
This article examines the use of an increasingly popular method of cash disbursement in the insurance industry: stock repurchase programs. Using a sample of stock repurchase announcements between 1981 and 1997, we examine the motivation for stock repurchase, estimate the market reaction to the repurchase announcement, and evaluate the magnitude of the reaction as it relates to particular insurance industry and firm characteristics.
2004
Long-term care insurance (LTCI) can be an effective way of protecting individual assets from nonacute medical costs not covered by traditional health insurance. Prior research suggests a number of economic, health, and family structure factors related to the decision to purchase LTCI.
2004
Small firms that offer health insurance to their employees may face variable premiums if they hire employees with high expected health costs. To avoid expensive premium variability, small firms may attempt to maintain a workforce with low expected health costs. This results in employment distortions.
2004
Risk management has a central role in corporate America. Insurance companies frequently manage risk by purchasing reinsurance because it reduces the downside risk (i.e., bankruptcy risk) of an insurer. Because reinsurance is costly, Mayers and Smith (1990, Journal of Business, 63: 19-40) argue that reinsurance purchases should be negatively associated with the diversification of the owners' portfolios.
2004
This article analyzes the effects of uncertainty and increases in risk aversion on the demand for health insurance using a theoretical model that highlights the interdependence between insurance and health care demand decisions. Two types of uncertainty faced by the individuals are examined. The first one is the uncertainty in the consumer's pretreatment health and the second is the uncertainty surrounding the productivity of health care.
2004
Previous studies of financial health of insurance companies are mainly focused on insurers operating in the United States and developed economies. This article focuses on the solvency of general (property-liability) and life insurance companies in Asia using firm data and macro data separately. It uses different classification methods to classify the financial status of both general and life insurance companies.
2004
The demand for insurance is examined when the indemnity schedule is subject to an upper limit. The optimal contract is shown to display full insurance above a deductible up to the cap. Some results derived in the standard model with no upper limit on coverage turn out to be invalid; the optimal deductible of an actuarially fair policy is positive and insurance may be a normal good under decreasing absolute risk aversion.
2004
We observe on the market that a lot of excess of loss reinsurance treaties have specific clauses such as an annual aggregate deductible or reinstatements. These clauses imply that the aggregate claims of the ceding company not only depends on the company’s own retention but also on the aggregate claims of the reinsurer. Theses risks are obviously dependent.
2004
This article describes the current state of affairs in the EU Solvency II project. The background and international context of the project is discussed, as well as the general outline of a future EU solvency system. In particular, several areas where further technical work is needed are outlined.
2004
This article describes smooth nonstationary generalized additive modeling for sample extremes, in which spline smoothers are incorporated into models for exceedances over high thresholds. We summarize the smoothing methodology as a new tool for practical extreme value exploration in finance and insurance.
2004
This paper consists of three parts. In the first part we derive the asymptotic behavior of the optimal ruin probability of an insurer who invests optimally in a stock in the presence of positive interest force and claims with tails of regular variation. Our results extend previously obtained results by Gaier & Grandits (2002) with zero interest, and by Klüppelberg & Stadtmüller (1998) without investment possibility.
2004
Gerber has proposed a compound binomial model, as an approximation to the classical risk model, to describe the surplus process of an insurance company. Within the compound binomial model, the claims occur according to a bionmial process with independent increments. Cossette et al. present a compound Markov binomial model which is an extension of Gerber’s model.
2004
Former Texas regulator and current university professor Etti Baranoff provides some interesting insights into the post-9/11world and the evolving risk management landscape in this brave new world.
2004
Risk Aversion and the Willingness to Pay for Insurance: A Cautionary Discussion of Adverse Selection
Textbooks frequently describe adverse selection as an almost inevitable feature of insurance markets with heterogeneous buyers and asymmetric information. But if low-risk applicants are more risk averse than their high-risk counterparts, the former may be as willing or more willing than the latter to purchase insurance at any given price.
2004
The 2003 CAS Membership Survey provided a good deal of positive news for the Casualty Actuarial Society (CAS). First of all, the commitment of CAS members was evidenced by the high response rate to the survey and the high number of members who took the time to respond to write-in questions. 1,934 members completed the survey, for a response rate of 52%.
2004
Many real-world financial contracts have some sort of minimum rate of return guarantee included. One class of these guarantees is so-called relative guarantees, i.e., guarantees where the minimum guaranteed rate of return is given as a function of the stochastic return on a reference portfolio. These guarantees are the topic of this paper.
2004
The article concerns the problem of purchasing a reinsurance policy that maximizes the survival probability of the insurer. Explicit forms of the contracts optimal for the insurer are derived which are stop loss or truncated stop loss depending on the initial surplus, a quota to be spend on reinsurance and pricing rules of both the insurer and the reinsurer.
2004
Regulatory dissonance not only poses serious challenges to insurance companies seeking global expansion, but also reiterates the fact that business models cannot be exported in their entirety from one country to another. This paper presents the regulatory dissonance that exists between the non-life insurance industry in the U.S. and India.
2004
Using data from voluntary Swedish health insurance societies 1902-1910, this article analyzes the coexistence of pure and mutual insurance societies where pure societies are characterized by charging ex ante premiums only while mutuals in addition charge ex post assessments. On average, mutual insurance societies are found to be larger and to offer greater insurance coverage per member.
2004
This paper examines the developments in the production efficiency of the Austrian insurance market for the period 1994-1999 using firm-specific data on life/health and non-life insurers obtained from the Austrian insurance regulatory authority. The article uses a Bayesian stochastic frontier to obtain aggregate and firm-specific estimates of production efficiency across insurer types and time.
2004
Considering a simple portfolio selection problem by agents with quadratic utility, an apparently counterintuitive outcome results. When such a choice is over two assets that can be ordered in terms of riskiness, an agent that is more risk averse may optimally invest a larger portion of wealth in the riskier asset.
2004
A perennial question about the National Flood Insurance Program is: how can participation be increased? An empirical analysis of individual-level data reveals that in a sample of coastal areas the participation rate is 49 percent of eligible properties. Participation responsiveness to price is inelastic, but it has been increased by the mandatory purchase requirements for mortgage borrowers.
