Internationalization of the Reinsurance Industry: An Analysis of the Net Exposure of Reinsurers

Journal of Risk and Insurance, Forthcoming

41 Pages Posted: 17 Apr 2008 Last revised: 26 Feb 2014

See all articles by Cassandra R. Cole

Cassandra R. Cole

Florida State University - College of Business

William L. Ferguson

University of Louisiana at Lafayette - Department of Economics and Finance

Ryan B. Lee

Royal Roads University

Kathleen A. McCullough

Florida State University - College of Business

Date Written: October 1, 2011

Abstract

In today’s global marketplace, the internationalization decision has become increasingly relevant for a greater number of firms. We use the framework of the eclectic paradigm to empirically investigate the decision of U.S. reinsurers to internationalize based on their net exposure in both developed and developing nations. The reinsurance industry poses an interesting setting to study internationalization as we can measure the net exposure in a county given the requirements to report both ceded and assumed reinsurance. This allows for a better measure of the overall exposure reinsurers have in a given country. Of particular interest in exploring internationalization are the diversification benefits as well as the potential impact of free-trade initiatives and the economic development of the host country. We find that the characteristics impacting net reinsurance exposure vary based on the characteristics of the countries.

Keywords: multinational corporation, internationalization, reinsurance, developing countries, eclectic paradigm

JEL Classification: G15, G22

Suggested Citation

Cole, Cassandra R. and Ferguson, William L. and Lee, Ryan B. and McCullough, Kathleen A., Internationalization of the Reinsurance Industry: An Analysis of the Net Exposure of Reinsurers (October 1, 2011). Journal of Risk and Insurance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1121136 or http://dx.doi.org/10.2139/ssrn.1121136

Cassandra R. Cole

Florida State University - College of Business ( email )

423 Rovetta Business Building
Tallahassee, FL 32306-1110
United States

William L. Ferguson

University of Louisiana at Lafayette - Department of Economics and Finance ( email )

323 Moody Hall, P.O. Box 44570
Lafayette, LA 70504
United States
337-482-6664 (Phone)
337-482-6675 (Fax)

HOME PAGE: http://apfd.louisiana.edu/endowed/Ferguson-William.shtml

Ryan B. Lee

Royal Roads University ( email )

2005 Sooke Road
Victoria, British Columbia V9B 5Y2
Canada

Kathleen A. McCullough (Contact Author)

Florida State University - College of Business ( email )

Department of Risk Management and Insurance
150 Rovetta Business Building
Tallahassee, FL 32306-1110
United States
850-644-8358 (Phone)
850-644-4077 (Fax)

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