Centro de Documentacion de Fundación MAPFRE - The Effects of business mix on internal and external reinsurance usage

MAP20190028530

The Effects of business mix on internal and external reinsurance usage / Ching-Yuan Hsiao, Yung-Ming Shiu

Sumario: Our overali aim in this research is to identify the effects of the business mix of insurers on their overail reinsurance usage, based on the use of the Cragg (Econometrica39: 829-844, 1971) model, for our analysis of the reinsurance decisions made by insurers in the U.K. life insurance industry between 2005 and 2014. Our findings reveal a positive (negative) correlation between with-profit (unit-linked) business and reinsurance, thereby indicating that insurers underwriting riskier product mixes have a higher demand for reinsurance. We go on to separate total reinsurance into internal and external reinsurance before carrying out further analyses. Our results reveal that insurers underwriting more with-profit business appear to use more internal reinsurance, which would seem to imply that internal reinsurance could be more cost effective for those reinsurance transactions involving greater managerial discretion

En: Geneva papers on risk and insurance : issues and practice. - Geneva : The Geneva Association, 1976- = ISSN 1018-5895. - 01/10/2019 Volumen 44 Número 4 - octubre 2019 , p. 624-652

1. Mercado de reaseguros . 2. Reaseguro . 3. Análisis de mercados . I. Shiu, Yun-Ming . II. Título.