Underwriting Apophenia and Cryptids: Are Cycles Statistical Figments of our Imagination?

Boyer, M. M. & Owadally, I. (2015). Underwriting Apophenia and Cryptids: Are Cycles Statistical Figments of our Imagination?. The Geneva Papers on Risk and Insurance - Issues and Practice, 40(2), pp. 232-255. doi: 10.1057/gpp.2014.12

[img]
Preview
Text - Accepted Version
Download (1MB) | Preview

Abstract

This paper re-examines the evidence in favour of the existence of underwriting cycles in property and casualty insurance and their economical significance. Using a meta-analysis of published papers in the area of insurance economics, we show that the evidence supporting the existence of underwriting cycles is misleading. There is, in fact, little evidence in favour of insurance cycles with a linear autoregressive character. This means that any cyclicality in firm profitability in the property and casualty insurance industry is not predictable in a classical econometric framework. It follows that pricing in the property and casualty insurance industry is not incompatible with that of a competitive market.

Item Type: Article
Additional Information: This is a post-peer-review, pre-copyedit version of an article published in Geneva Papers on Risk and Insurance - Issues and Practice. The definitive publisher-authenticated version Boyer, M. M. & Owadally, I. (2015). Underwriting Apophenia and Cryptids: Are Cycles Statistical Figments of our Imagination?. GENEVA PAPERS ON RISK AND INSURANCE-ISSUES AND PRACTICE, 40(2), pp. 232-255. doi: 10.1057/gpp.2014.12 is available online at: http://dx.doi.org/10.1057/gpp.2014.12
Uncontrolled Keywords: Property and Liability Insurance, Underwriting Profits, Insurance Pricing
Subjects: H Social Sciences > HG Finance
Divisions: Cass Business School > Faculty of Actuarial Science & Insurance
URI: http://openaccess.city.ac.uk/id/eprint/14276

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics