 Contingent factors of the coinsurance function of internal capital markets: Evidence from the US nonlife insurance industryChing-Yuan Hsiao and Yung-Ming Shiu The North American Journal of Economics and Finance, 2023, vol. 66, issue C Abstract: By analyzing intragroup reinsurance activities in the US nonlife insurance sector from 1999 to 2016, we provide evidence that the coinsurance function of internal capital markets is contingent on internal capital providers’ financial resources and the relative sizes of capital receivers within the group. We demonstrate that insurance groups commonly use intragroup reinsurance (a substitute for capital) to support insurers that sustain underwriting losses. Larger insurers are more likely to obtain internal reinsurance if their affiliated insurers hold more financial resources. Our findings show that the financial capabilities of group members providing support affect the feasibility of the coinsurance function through the activities of internal capital markets. Group members with greater influence are more likely to benefit from the coinsurance function. Keywords: Intragroup reinsurance; Internal capital markets; Underwriting loss; Financial resources; Coinsurance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:66:y:2023:i:c:s1062940823000311 DOI: 10.1016/j.najef.2023.101908 Access Statistics for this article The North American Journal of Economics and Finance is currently edited by Hamid Beladi More articles in The North American Journal of Economics and Finance from Elsevier |
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