Quantitative analysis of materiality in marine insurance

Kevin X. Li, Yulan Wang and Jie Min

Maritime Policy & Management, 2009, vol. 36, issue 5, 437-455

Abstract: The ex post test of materiality is the traditional approach for a court to examine whether the non-disclosed information of the policyholder is material for a prudent underwriter. The approach of the ex post test has been questioned by the shipping industry, and amendments to the relevant clauses of the Marine Insurance Act 1906 are under discussion. In this research, the factors that significantly relate to marine incidents are determined based on the panel data through the step-wise random intercept model. The materiality of each factor can be reflected by constructing a factor-weighted risk indicator, which can be applied in the ex ante risk assessment of insured vessels. It endeavors to establish a risk index system for measuring the risk level of a ship, which can help both the underwriter and the policyholder in effective assessment of the materiality of information when they conclude the contract. A panel data of total loss incidents during the period 1999--2007 has been collected for verification of the methodology.

Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://hdl.handle.net/10.1080/03088830903187168 (text/html)
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:taf:marpmg:v:36:y:2009:i:5:p:437-455

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TMPM20

DOI: 10.1080/03088830903187168

Access Statistics for this article

Maritime Policy & Management is currently edited by Dr Kevin Li and Heather Leggate McLaughlin

More articles in Maritime Policy & Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().