Insurance IPOs--A Test of the Underpricing Theories
AbstractThis paper uses a numerical experiment to observe the behavior of the variance of total losses of an insured group, as the group is continually divided and subdivided. In the tradition of Rothschild and Stiglitz (1976) only loss frequency is analyzed. The results of the experiment suggest that an insurer need only divide a large group of insureds into a relatively small number of subgroups (10–15) to achieve most of the efficiency gains that are available.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Western Risk and Insurance Association in its journal Journal of Insurance Issues.
Volume (Year): 22 (1999)
Issue (Month): 1 ()
Contact details of provider:
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (James Barrese).
If references are entirely missing, you can add them using this form.