Does Reinsurance Need Reinsurers?
AbstractThe reinsurance market is the secondary market for insurance risks. It has a very specific organization. Direct insurers rarely trade risks with each other. Rather, they cede part of their primary risks to specialized professional reinsurers who have no primary business. This article offers a model of equilibrium in reinsurance and capital markets in which professional reinsurers arise endogenously. Their role is to monitor primary insurers credibly, so that insurers can raise capital more easily. In equilibrium, the financial structure of primary insurers consists of a mix of reinsurance and outside capital. The comparative statics yield empirical predictions which are broadly in line with a number of stylized facts from the reinsurance market. Copyright The Journal of Risk and Insurance, 2006.
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 InfoPaper provided by Financial Markets Group in its series FMG Discussion Papers with number dp447.
Date of creation: Apr 2003
Date of revision:
Contact details of provider:
Web page: http://www.lse.ac.uk/fmg/
Other versions of this item:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Lemoyne de Forges, Sabine & Bibas, Ruben & Hallegatte, Stephane, 2011. "A dynamic model of extreme risk coverage : resilience and efficiency in the global reinsurance market," Policy Research Working Paper Series 5807, The World Bank.
- repec:hal:wpaper:halshs-00800460 is not listed on IDEAS
- Selim Mankaï & Aymen Belgacem, 2013.
"Interactions Between Risk-Taking, Capital, and Reinsurance for Property-Liability Insurance Firms,"
EconomiX Working Papers
2013-23, University of Paris West - Nanterre la Défense, EconomiX.
- Selim Mankaï & Aymen Belgacem, 2014. "Interactions Between Risk-Taking, Capital, and Reinsurance for Property- Liability Insurance Firms," Working Papers 2014-154, Department of Research, Ipag Business School.
- van Lelyveld, Iman & Liedorp, Franka & Kampman, Manuel, 2011.
"An empirical assessment of reinsurance risk,"
Journal of Financial Stability,
Elsevier, vol. 7(4), pages 191-203, December.
- repec:hal:ciredw:halshs-00800460 is not listed on IDEAS
- John Lewis, 2010. "Reinsurers as financial intermediaries in the market for catastrophic risk," DNB Occasional Studies 802, Netherlands Central Bank, Research Department.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (The FMG Administration).
If references are entirely missing, you can add them using this form.