Analysis of multinational underwriting cycles in property‐liability insurance

Chao‐Chun Leng and Ursina B. Meier

Journal of Risk Finance, 2006, vol. 7, issue 2, 146-159

Abstract: Purpose - The paper sets out to use the loss ratio series of Switzerland, Germany, the USA and Japan, to test whether underwriting cycles still exist internationally and to identify possible structural changes. Design/methodology/approach - Based on financial theory and insurance pricing theory, co‐integration analysis was performed to check possible causes of structural changes. Findings - All four countries have breaks in different years. This result leads to the hypothesis that the factors affecting underwriting cycles are mainly country‐specific, such as economic environment and regulations, rather than global/international. Although the financial theory and the insurance pricing theory suggest that the loss ratio series should be co‐integrated with the interest rate series with co‐integrating coefficient −1, the empirical results do not support the theories. Originality/value - More detailed analysis for the time series characteristics for countries other than the USA is presented to investigate the possible existence of underwriting cycles.

Keywords: Underwriting; Property; Insurance; Switzerland; Germany; United States of America; Japan (search for similar items in EconPapers)
Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jrfpps:15265940610648599

DOI: 10.1108/15265940610648599

Access Statistics for this article

Journal of Risk Finance is currently edited by Nawazish Mirza

More articles in Journal of Risk Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().