This paper examines the relationship between mergers and acquisitions, efficiency, and scale economies in the US life insurance industry. We estimate cost and revenue efficiency over the period 1988-1995 using data envelopment analysis (DEA). The Malmquist methodology is used to measure changes...

This paper presents a theoretical and empirical analysis of the effects of no fault automobile insurance on accident rates. As a mechanism for compensating the victims of automobile accidents, no fault has several important advantages over the tort system. However, by restricting access to tort,...

In this introductory chapter to an upcoming book, the authors discuss the two principal types of efficiency frontier methodologies - the econometric (parametric) approach and the mathematical programming (non-parametric) approach. Frontier efficiency methodologies are discussed as useful in a...

This paper provides new information on the effects of deregulation and consolidation in financial services markets by analyzing the Spanish insurance industry. The sample period 1989-1998 spans the introduction of the European Union’s Third Generation Insurance Directives, which deregulated...

A limitation of the existing financial pricing models is the implicit or explicit assumption that insurers produce only one type of insurance, even though most insurers produce multiple types of coverage with differing risk characteristics and liability growth rates. The purpose of this paper is...

In this paper we investigate the extent to which insurance companies utilize financial derivatives contracts in the management of risks. The data set we employ allows us to observe the universe of individual insurer transactions for a class of contracts; namely those normally thought of as...

In December 1992, the National Association of Insurance Commissioners (NAIC) adopted a life-health insurer risk-based capital (RBC) formula and model law that became effective with the 1993 annual statement filed in March 1994.<p> <p>In principle, well-designed RBC requirements can help achieve an...</p></p>

The objective of this paper is to provide new information on the performance of efficiency estimation methods by applying a wide range of econometric and mathematical programming techniques to a sample of U.S. life insurers. Average efficiencies differ significantly across methods. The...

This paper analyzes the basis risk of catastrophic-loss (CAT) index derivatives, which securitize losses from catastrophic events such as hurricanes and earthquakes. We analyze the hedging effectiveness of these instruments for 255 insurers writing 93 percent of the insured residential property...

This paper develops a pricing methodology and pricing estimates for the proposed Federal excess-of- loss (XOL) catastrophe reinsurance contracts. The contracts, proposed by the Clinton Administration, would provide per-occurrence excess-of-loss reinsurance coverage to private insurers and...