: Laila Neuthor
: Andreas Richter, Thomas Hartung
: Intermediation in Reinsurance Markets
: Verlag Versicherungswirtschaft
: 9783862981977
: Münchener Reihe
: 1
: CHF 39.10
:
: Internationale Wirtschaft
: English
: 298
: Wasserzeichen/DRM
: PC/MAC/eReader/Tablet
: PDF
Reinsurance cover can either be purchased directly or via an intermediating reinsurance broker. The importance of reinsurance brokers has increased steadily since the early nineties. The thesis thus aims to analyze the impact of the reinsurance broker on reinsurance market efficiency and to identify the reasons why primary insurers to an increasing extent contract via an intermediating reinsurance broker. As the reinsurance broker's intermediation services are costly for the primary, intermediation needs to increase the primary insurer's payoff or utility compared to the direct purchase of reinsurance cover. Otherwise, no primary would be willing to hire a broker firm for assistance in the reinsurance acquisition process. Chapter II clarifies the framework for reinsurance broker activity. Chapter III first gives an overview of the reinsurance broker market (III.2) with a special focus on the market concentration and the geographical importance of reinsurance brokers. In addition, the reinsurance broker's tasks before, during, and after the reinsurance contract conclusion (III.3) are introduced and the types of reinsurance broker remuneration frequently used (III.4) are outlined. Finally, the most prominent reinsurance broker regulatory frameworks (III.5) are introduced along with rationales for reinsurance broker regulation. Chapter IV is composed of five sections discussing the different aspects of the market function of the reinsurance broker. Chapter V gives a short summary of the main findings and concludes the thesis. By combining economic theory and market observations, this thesis addresses both scholars and reinsurance market specialists. Rückversicherung kann entweder direkt oder über einen vermittelnden Rückversicherungsmakler erworben werden. Die Bedeutung der Rückversicherungsmakler hat seit Anfang der 1990er Jahre international zugenommen. Vor dem Hintergrund dieser Entwicklung untersucht die Autorin die Effizienz des Rückversicherungsmarktes und die Gründe, warum Erstversicherer in zunehmendem Maße Rückversicherung über einen vermittelnden Rückversicherungsmakler abschließen. Kapitel II klärt die Rahmenbedingungen für das Tätigwerden der Rückversicherungsmakler. Kapitel III gibt zunächst einen Überblick über den Rückversicherungsmakler-Markt (III.2) mit einem besonderen Fokus auf die Marktkonzentration und die geographische Verteilung der Rückversicherungsmakler. Darüber hinaus werden die Aufgaben der Rückversicherungsmakler vor, während und nach dem Vertragsabschluss (III.3) vorgestellt und die häufigsten Arten der Vergütung (III.4) behandelt. Schließlich werden die wichtigsten Regelwerke für Rückversicherungsmakler (III.5) erläutert. Kapitel IV befasst sich detailliert mit verschiedenen Aspekten des Rückversicherungsmarktes und der Funktion der Broker. Kapitel V fasst die Ergebnisse kurz zusammen. Die Autorin verbindet ökonomische Theorie mit Marktbeobachtungen und leistet einen wichtigen Beitrag zu einem wenig erforschten Themengebiet. Die Arbeit richtet sich sowohl an Wissenschaftler als auch an die im Rückversicherungsmarkt tätigen Spezialisten.
Intermediation in Reinsurance Markets1
Editor’s Preface6
Author’s Preface8
Contents10
List of Figures18
List of Variables22
List of Abbreviations24
Part:24
2624
Part II: The Framework for Reinsurance Broker Activity32
1 The Concept of Reinsurance: Means of Risk Transfer, Pricing, and Market Cycles32
1.1 Preliminary Remarks32
1.2 Definition of Reinsurance33
1.3 Forms of Reinsurance35
1.4 Types of Reinsurance38
1.5 Pricing of Proportional Reinsurance Contracts42
1.6 Pricing of Non-Proportional Reinsurance Contracts46
1.6.1 Preliminary Remarks46
1.6.2 Net Risk Premium47
1.6.3 Cost of Capital51
1.6.4 Loadings58
1.6.5 Types of Premium Payment62
1.7 Concept and Benefits of Co-Reinsurance Agreements63
1.8 The Influence of Reinsurance Market Cycles on the Price for Reinsurance65
1.8.1 Identification of Market Cycles in Primary Insurance and Reinsurance Markets65
1.8.2 Underwriting-Induced Changes68
1.8.3 Capital Supply–Induced Changes70
2 Reinsurance Market Overview: Size, Market Concentration, and Recent Developments77
2.1 Preliminary Remarks77
2.1.1 Objective and Structure of the Analysis77
2.1.2 Data Sets and Estimation Methodology78
2.2 Reinsurance Market Development81
2.2.1 Development of the Global Reinsurance Market Premium Volume81
2.2.2 Development of Reinsurance Market Concentration87
2.3 Geographic Origin of Reinsurance Cover97
2.4 Selected Points of Differentiation of Reinsurance Companies101
2.4.1 Volatility of Combined Ratios101
2.4.2 Choice of Distribution Channel: Broker Reinsurers and Direct Reinsurers107
3 Reasons for Reinsurance Purchase — A Critical Evaluation109
3.1 Preliminary Remarks109
3.2 Improved Diversification and Efficient Risk Allocation110
3.2.1 Primary Risk Aversion110
3.2.2 Improvement of Risk Diversification Efforts111
3.2.3 Transfer of Underwriting Risk and Increase of Underwriting Capacity112
3.3 Reduction of Financial Distress and Bankruptcy Costs117
3.4 Government- and Regulatory-Induced Demand for Reinsurance118
3.4.1 Balance-Sheet Design and Tax Optimization118
3.4.2 Reduction of Regulatory Capital Requirements120
3.5 Reinsurance and Information Asymmetries122
3.5.1 Conflicts between Shareholders and Policyholders122
3.5.2 Management Control123
3.5.3 Reinsurance Cover as Solvency-Signaling Device126
3.5.4 Reduction of Capital Costs129
3.6 Knowledge-Transfer and Service130
3.7 Exploitation of Comparative Advantages of Reinsurance133
3.8 Critical Evaluation of Reasons for Reinsurance Purchase135
4 Reinsurance Market Distortions138
4.1 Preliminary Remarks138
4.2 Problems of Adverse Selection139
4.3 Problems of Moral Hazard148
Part III: Reinsurance Intermediation: Market Development, Intermediary Tasks and Remuneration, and Regulation154
1 Preliminary Remarks154
2 Reinsurance Broker Market156
2.1 Reinsurance Broker Origins156
2.2 Recent Developments in the Reinsurance Broker Market157
2.3 Market Concentration and Competitive Environment159
2.4 Regional Importance of Reinsurance Brokers162
3 Reinsurance Broker Tasks3.1 Preliminary164
3.1 Preliminary Remarks164
3.2 Choice of Reinsurance Broker and Intermediation Clause165
3.3 Risk Analysis and Structuring of Reinsurance Demand167
3.4 Placement of Reinsurance Cover169
3.5 Policy Administration, Claims Management, and Risk Management Consulting173
4 Reinsurance Broker Remuneration174
4.1 Timing and Payment174
4.2 Premium Volume–Based Commissions174
4.3 Contingent Commissions175
4.4 Fee-for-Advice177
4.5 Interest Earnings on Transfered Payments177
5 Regulation of Reinsurance Brokers178
5.1 Rationales for Reinsurance Broker Regulation178
5.2 Reinsurance Broker Regulation in the U.S.180
5.3 Reinsurance Broker Regulation in the EU182
Part IV: The Market Function of the Reinsurance Intermediary186
1 Preliminary Remarks186
2 Comparison of Financial Intermediation in Capital, Primary Insurance, and Reinsurance Markets189
2.1 Preliminary Remarks189
2.2 Financial Intermediation in Capital Markets189
2.3 Differentiation of Financial Intermediation in Capital and Reinsurance Markets192
2.4 Intermediation in Primary Insurance Markets194
2.5 Differentiation of Intermediation in Primary and Reinsurance Relationships197
2.5.1 Professional Contracting Parties198
2.5.2 Obligatory Reinsurance Treaties199
2.5.3 Market and Business Conduct202
2.5.4 Conclusion203
3 Influence of Reinsurance Intermediation on Agency Costs: Information Intermediation in Reinsurance Markets204
3.1 Preliminary Remarks204
3.2 Information Intermediation before Reinsurance Contract Conclusion205
3.2.1 Preliminary Remarks205
3.2.2 Risk-Adequate Reinsurance Premiums206
3.2.3 Extension of Available Reinsurance Cover209
3.2.4 Reinsurer Default Risk Classification210
3.2.5 Conclusion212
3.3 Information Intermediation during and after the Reinsurance Treaty Period213
3.