The Impact of Internal and External Reinsurance on Insurers' Performance and Price
學年 109
學期 2
出版（發表）日期 2021-02-04
作品名稱 The Impact of Internal and External Reinsurance on Insurers' Performance and Price
作品名稱（其他語言）
著者 Jin Park; Byeongyong Paul Choi; Chia-Ling Ho
單位
出版者
著錄名稱、卷期、頁數 Managerial Finance 47(7), p.937-950
摘要 Purpose This study is designed to investigate how the use of reinsurance affects the primary insurers' profitability and pricing on their insurance products. Design/methodology/approach This study examines the impact of reinsurance on the insurers’ profitability using a two stage least square to control the endogeneity problem with a reinsurance variable. The study analyzes 11,894 firm-year observations between 2001 and 2009. Findings The study finds that the use of reinsurance in general has a negative impact on property/casualty insurers' performance. However, reinsurance obtained from affiliated firms has a positive impact on profitability, which supports the existence of internal capital markets in the insurance industry. Research limitations/implications The finding of study implies that reinsurance transactions are used among affiliated insurers for not only managing underwriting risk and increasing underwriting capacity but also subsidizing capital through internal capital markets. In term of limitation, due to the availability of price data, this study uses only one insurance cycle of 9 years, albeit not weakening the findings. Practical implications Especially for non-affiliated insurers, the finding suggests that they need to find an alternative way to transfer underwriting risk without having to use costly reinsurance. Originality/value This paper directly investigates the impact of reinsurance utilization on insurers' profitability and pricing.
關鍵字 Performance;Profitability;External reinsurance;Internal reinsurance
語言 en
ISSN 0307-4358
期刊性質 國外
收錄於 ESCI
產學合作
通訊作者
審稿制度 是
國別 USA
公開徵稿
出版型式 ,電子版
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