Reinsurance is a transaction insurance firms use to hedge risk. Existing studies have only investigated the demand for … reinsurance. Thus, we do not have direct evidence on whether the use of reinsurance creates value. Our study provides this … evidence. We find a positive relation between the use of reinsurance and value. This relation is nuanced. Our results suggest …

supply of intermediary capital is perfectly elastic. We take the US catastrophe reinsurance market as an example, using … results suggest that the price of reinsurance generally exceeds fair' values, particularly in the aftermath of large events …

expected utility by purchasing reinsurance and managing reinsurance counterparty risk with a default-free hedging instrument …, where the reinsurance premium is calculated by the expected value principle and the price of the hedging instrument equals … that the stop-loss reinsurance is always optimal. The form of optimal hedging payoff, however, changes with different cost …