Catastrophic Losses and Insurer Profitability: Evidence from 9/11
24 Pages Posted: 10 Mar 2008
There are 2 versions of this paper
Catastrophic Losses and Insurer Profitability: Evidence from 9/11
Abstract
We examine the effects of 9/11 on the insurance industry, hypothesizing a short-run claim effect, resulting from insufficient premium ex ante for catastrophic losses, and a long-run growth effect, resulting from ex post insurance supply reductions and risk updating. Following Yoon and Starks (1995) we use short- and long-run abnormal forecast revisions to measure both effects, analyzing them as a function of firm-specific characteristics. We find that firm type, loss estimates, reinsurance use, and tax position are important determinants of the short-run position. Firm type, loss estimates, financial strength, underwriting risk, and reinsurance are key determinants of the firm's long-run position.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
On the Pricing of Intermediated Risks: Theory and Application to Catastrophe Reinsurance
By Kenneth Froot and Paul G.j. O'connell
-
On the Pricing of Intermediated Risks: Theory and Application to Catastrophe Reinsurance
By Kenneth Froot and Paul G.j. O'connell
-
The Pricing of U.S. Catastrophe Reinsurance
By Kenneth Froot and Paul G.j. O'connell
-
U.S. Reinsurance Prices, Financial Quality, and Global Capacity
By Mary A. Weiss and Joon-hai Chung
-
An Empirical Analysis of the Economic Impact of Federal Terrorism Reinsurance
By Jeffrey R. Brown, J David Cummins, ...