An Empirical Investigation of the Effect of Growth on Short‐Term Changes in Loss Ratios

Michael M. Barth and David L. Eckles

Journal of Risk & Insurance, 2009, vol. 76, issue 4, 867-885

Abstract: Given the use of premium growth as a risk measure in regulatory and private risk assessment models, the impact of growth on underwriting profitability is an important question. Our results show a negative relationship between premium growth and changes in loss ratios, suggesting that premium growth alone does not necessarily result in higher underwriting risk. Further, there is a positive relationship between claim count growth and changes in loss ratios, suggesting that claim count growth may be a preferred measure of underwriting risk.

Date: 2009
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https://doi.org/10.1111/j.1539-6975.2009.01323.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:jrinsu:v:76:y:2009:i:4:p:867-885

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