We analyze life insurance policy surrender activity to determine whether surrender is a function of certain macroeconomic variables and, therefore, highly correlated across policies. Results support the Emergency Fund Hypothesis and the Interest Rate Hypothesis. In addition, we provide evidence...

In an increasingly competitive environment, the successful auto insurer is one that manages its cost in an efficient manner. While the auto insurance claims area does not generate revenue for the firm, it is one that provides the opportunity for cost reductions through its recovery efforts. We...

We examine the efficiency of fraternal insurers as compared to mutual and stock insurers in the U.S. life insurance industry. We test the hypothesis of equal efficiency across fraternal, mutual, and stock insurers. We find that mutual and stock insurer technology is dominant for producing the...

This study empirically examines properties of matched-pair versus non matched- pair sampling methods in the context of financial distress for the U.S. life insurance industry. While the majority of prior insurer insolvency studies employed matched-pair sampling techniques to identify important...

We extend previous research by Doerpinghaus (1991) and others by examining relationships between private passenger auto insurance complaint ratios and insurer characteristics. Consistent with Doerpinghaus, results indicate that insurers with higher complaint ratios are more likely to write...

This paper examines the pricing of term life insurance based on the economic approach of profit maximization, and incorporating the financial approach of stochastic interest rates, investment returns, and the insolvency option, while also including actuarial modeling of mortality risk. Optimal...

Mayers and Smith (1981) extended Jensen and Meckling’s (1976) seminal work on organizational structure and agency theory, and argued that the costs of controlling the owner-manager conflict are higher for mutual insurers than for stock insurers because of fewer and less effective monitoring...

This study examines policy (Linton) yields of two popular forms of cash value life insurance (whole life and universal life) for the period 1988 to 1998. Several hypotheses and statements by professionals suggest that WL likely would dominate UL in terms of policy yield. However, results...