The Impact of Unexpected Natural Disasters on Insurance Markets

Posted: 17 Jul 2018

See all articles by Ghanshyam Sharma

Ghanshyam Sharma

Seton Hall University

Kurt W. Rotthoff

Seton Hall University - W. Paul Stillman School of Business

Date Written: June 27, 2018

Abstract

In this paper, we examine the impact of unexpected natural disasters on the insurance industry. The industry is exposed to greater risks in states with large populations. Hence we normalize the unexpected disasters with the population of the state. We find evidence that total sales of the insurance industry goes up in response to an unexpected disaster. However, we also find evidence that unexpected disasters lead to higher market concentration. This could either be because some insurance firms becoming insolvent or people preferring to purchase insurance from larger firms.

Keywords: Catastrophic Risks, Natural Disasters, Insurance Markets

Suggested Citation

Sharma, Ghanshyam and Rotthoff, Kurt W., The Impact of Unexpected Natural Disasters on Insurance Markets (June 27, 2018). Available at SSRN: https://ssrn.com/abstract=3203448

Ghanshyam Sharma (Contact Author)

Seton Hall University ( email )

United States
8646504947 (Phone)

Kurt W. Rotthoff

Seton Hall University - W. Paul Stillman School of Business ( email )

400 S Orange Avenue
JH 674
South Orange, NJ 07079
United States
973-761-9102 (Phone)

HOME PAGE: http://pirate.shu.edu/~rotthoku/

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