Corporate Demand for Insurance: An Empirical Analysis of the U.S. Market for Catastrophe and Non-Catastrophe Risks

Erwann Michel-Kerjan, Paul Raschky and Howard Kunreuther

No 17403, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using a unique dataset of insurance decisions by over 1,800 large U.S. corporations, this study provides the first empirical analysis of firm behavior that compares corporate demand for property and catastrophe insurance (here, terrorism). We combine demand and supply data and apply a simultaneous-equation approach to address the problem of endogenous premium decisions. The main finding is that demand for property and catastrophe insurance are not very different and that the demand for catastrophe coverage is actually more price inelastic. We also show that a corporation's ability to self-insure affects the demand for catastrophe insurance but not for property insurance.

JEL-codes: D21 D81 G22 H56 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-agr and nep-ias
Note: PE
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Corporate Demand for Insurance: An Empirical Analysis of the U.S. Market for Catastrophe and Non-Catastrophe Risks (2009)
Working Paper: Corporate Demand for Insurance: An Empirical Analysis of the U.S. Market for Catastrophe and Non-Catastrophe Risks (2009)
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