{"title":"Adverse Selection in Reinsurance Markets","authors":"J. R. Garven, James I. Hilliard, Martin Grace","doi":"10.2139/ssrn.1911614","DOIUrl":null,"url":null,"abstract":"This paper looks for evidence of adverse selection in the relationship between primary insurers and reinsurers. We test the implications of a model in which informational asymmetry—and therefore, its negative consequences—decline over time. Our tests involve a data panel consisting of U.S. property-liability insurance firms that reported to the National Association of Insurance Commissioners during the period 1993–2012. We find that the amount of reinsurance, insurer profitability, and insurer credit quality all increase with the tenure of the insurer–reinsurer relationship.","PeriodicalId":43920,"journal":{"name":"Geneva Risk and Insurance Review","volume":"39 1","pages":"222-253"},"PeriodicalIF":0.7000,"publicationDate":"2014-06-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2139/ssrn.1911614","citationCount":"40","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Geneva Risk and Insurance Review","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.2139/ssrn.1911614","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 40
Abstract
This paper looks for evidence of adverse selection in the relationship between primary insurers and reinsurers. We test the implications of a model in which informational asymmetry—and therefore, its negative consequences—decline over time. Our tests involve a data panel consisting of U.S. property-liability insurance firms that reported to the National Association of Insurance Commissioners during the period 1993–2012. We find that the amount of reinsurance, insurer profitability, and insurer credit quality all increase with the tenure of the insurer–reinsurer relationship.
本文在原保险人与再保险人的关系中寻找逆向选择的证据。我们测试了一个模型的含义，在这个模型中，信息不对称——因此，它的负面后果——随着时间的推移而下降。我们的测试涉及一个由美国财产责任保险公司组成的数据面板，这些公司在1993年至2012年期间向美国全国保险专员协会(National Association of insurance commissioner)报告。我们发现再保险金额、保险公司盈利能力和保险公司信用质量都随着再保险关系的持续时间而增加。
期刊介绍：
The Geneva Risk and Insurance Review (GRIR), the academic journal of The Geneva Association, is the flagship journal of the European Group of Risk and Insurance Economists (EGRIE). The GRIR publishes original research that advances our understanding of the economics of risk and uncertainty and the management thereof through insurance and other mechanisms.
Specific focus areas include: the economics of insurance products and markets; decision theory under uncertainty; risk sharing or risk mitigation mechanisms for individuals, corporations, and society; market failures related to risk sharing and mitigation mechanisms, including those arising from information frictions and incentive problems; and the role of government in managing risk through regulation or social insurance provision.
The GRIR emphasizes scientifically rigorous research that is well-grounded in economic theory, based on both neoclassical and behavioral approaches. This includes pure theoretical research, empirical or experimental research that aims to test, falsify, or otherwise elucidate existing theoretical work as well as applied theoretical research that is of direct applicability to practitioners and policymakers.
The GRIR is well indexed, including EconLit, the Social Science Citation Index, and RePEC.
Until June 2005, the Journal was published as "The Geneva Papers on Risk and Insurance Theory".
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