Jennifer L Wang () (Risk Management and Insurance Department, National Cheng-chi University, #64, Sec. 2, Chi-Nan Road, Taipei 116, Taiwan.) Vincent Y Chang (Finance Department, National Taiwan University, Taipei, Taiwan. E-mails: d91723001@ntu.edu.tw, tzeng@ntu.edu.tw) Gene C Lai () (Department of Finance, Insurance, and Real Estate, PO Box 644746, Pullman, WA 99164-4746, U.S.A.) Larry Y Tzeng (Finance Department, National Taiwan University, Taipei, Taiwan. E-mails: d91723001@ntu.edu.tw, tzeng@ntu.edu.tw)
Abstract
This study investigates whether U.S. property-liability insurers change their demand for reinsurance after demutualization. Our empirical results show that the overall demand for reinsurance of converting insurers is not statistically different after the conversion. Furthermore, we find that converting insurers decrease the demand for reinsurance from non-affiliated reinsurers, but increase the demand for reinsurance from affiliated reinsurers after the conversion. One possible explanation is that converting insurers may treat reinsurance to affiliated reinsurers as risk retention rather than risk transfer so that they can reduce reinsurance cost. Another interesting finding is that converting insurers increase demand for reinsurance from non-affiliated reinsurers before conversion. The Geneva Papers (2008) 33, 566–584. doi:10.1057/gpp.2008.17
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.