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http://ssrn.com/abstract=225310
 
 

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Organizational Form and Insurance Company Performance: Stocks Versus Mutuals


Patricia Born


Florida State University - College of Business; Florida State University - College of Law; California State University, Northridge - Department of Finance, Real Estate, & Insurance

William M. Gentry


Williams College - Department of Economics

W. Kip Viscusi


Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

Richard J. Zeckhauser


Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

September 1995

NBER Working Paper No. w5246

Abstract:     
One unusual feature of the U.S. property-casualty insurance industry is the coexistence of stock and mutual companies. This paper explores the performance of these forms in the industry through a dynamic assessment of how mutual and stock insurance companies respond to differences in their underwriting environment. Agency theories suggest that the stock company may be more 'opportunistic' and less obligated to their insureds than mutuals. This article assesses the responses by stock and mutual firms to changes in the underwriting environment from 1984 to 1991, using measures of individual firms' performance, by state and by line, in eight different lines of insurance. Stock companies are more likely than mutuals to reduce their business in unprofitable situations, and have higher losses than mutuals for a given amount of premiums.

Number of Pages in PDF File: 54

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Date posted: July 19, 2000  

Suggested Citation

Born, Patricia and Gentry, William M. and Viscusi, W. Kip and Zeckhauser, Richard J., Organizational Form and Insurance Company Performance: Stocks Versus Mutuals (September 1995). NBER Working Paper No. w5246. Available at SSRN: http://ssrn.com/abstract=225310

Contact Information

Patricia H. Born
Florida State University - College of Business ( email )
250 Rovetta Business Building
Tallahassee, FL 32306-1110
United States
Florida State University - College of Law
425 W. Jefferson Street
Tallahassee, FL 32306
United States
California State University, Northridge - Department of Finance, Real Estate, & Insurance ( email )
Northridge, CA 91330-8379
United States
William M. Gentry (Contact Author)
Williams College - Department of Economics ( email )
Fernald House
Williamstown, MA 01267
United States
413-597-4257 (Phone)
413-597-4045 (Fax)
W. Kip Viscusi
Vanderbilt University - Law School ( email )
131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)
HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Vanderbilt University - Department of Economics
Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)
HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm
Vanderbilt University - Owen Graduate School of Management
401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)
HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm
Vanderbilt University - Strategy and Business Economics ( email )
Nashville, TN 37203
United States

Richard J. Zeckhauser
Harvard University - Harvard Kennedy School (HKS) ( email )
79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-1174 (Phone)
617-384-9340 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-495-1174 (Phone)
617-496-3783 (Fax)
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