Nat Pope

Determinants of International Insurers' Participation in Foreign Non-Life Markets

Mirroring the trend in the broader marketplace, the global insurance industry is steadily moving toward increased liberalization and deregulation. This study seeks to develop the first empirical model that examines the importance of foreign market characteristics as they relate to the participation of international insurers in the non-life business of those countries. The analysis reveals that market structure is an important factor in determining whether international insurers participate in a given foreign market. In addition, for markets that are not competitive, removing trade barriers would significantly improve the desirability of those countries as host markets. The results also suggest that countries with higher gross domestic product tend to attract more involvement from international insurers. While this research focuses on the markets of industrialized countries, the findings will provide significant implications for those emerging markets that have not yet collected relevant data on a number of the variables included in this study. Copyright 2003 The Journal of Risk and Insurance.

The Market Structure Performance Relationship in the International Insurance Sector

This article tests the applicability of the structure-conduct-performance (SCP) hypothesis in the international nonlife insurance marketplace. We employ a panel data regression methodology that includes 23 nations (developed and developing countries) over the time period of 1996 to 2003. The results reveal that the interaction of market liberalization and market concentration shares a complex relationship with market profitability. Our results show that the expectations associated with the SCP hypothesis are supported when the levels of liberalization are low. However, for markets that are highly liberalized the presence of foreign insurers significantly alters the dynamics of nonlife insurance markets. Copyright (c) The Journal of Risk and Insurance, 2008.

Contingent Commissions, Insurance Intermediaries, and Insurer Performance

This research investigates the relationship shared by contingent commission usage and insurer performance. We assess performance using both frontier efficiency and financial performance measures. Our findings reveal that the relationship is complex and varies across differing insurer business models. We find that nonusers of contingent commissions are more cost and revenue efficient than are users of contingents. However, among insurers that use contingents, relatively higher levels of use are associated with more efficient operations and also better financial performance. Additionally, these findings are conditioned on the type of distribution system the insurer employs.

Foreign Ownership and Non‐Life Insurer Efficiency in the Japanese Marketplace

Traditional shareholding patterns in Japan have experienced significant change beginning in the early 1990s. Since that time, foreign institutional shareholding has increased significantly largely at the expense of domestic financial institution ownership. This article examines whether these changes in ownership patterns share a relationship with insurer performance in the non‐life insurance market. Using data from 1992 to 2005, we assess performance in terms of efficiency measures using data envelopment analyses (DEA) techniques. Our results show that higher levels of domestic financial institution ownership in Japan are associated with insurer inefficiency. Relative to that relationship, the foreign ownership–insurer efficiency relationship is found to be positive. Additionally, we find that the disparity between those relationships has become more acute since 2001 when the Japanese non‐life insurance market experienced significant consolidation.

Grade-Risk: An Insurable Event in the Classroom

Grade-risk provides a powerful ally in establishing relevance between course content and the lives of students. As used in this article, grade-risk refers to the potential for the loss of points on examinations, quizzes, etc. This article describes the rationale and feasibility associated with the introduction of a student-centered grade insurance project that provides some measure of protection against grade-risk. The project engages students on multiple levels and in various capacities resulting in a significantly enriched learning experience. The authors include examples employed in their own classroom in demonstrating the feasibility and validity of grade insurance as a learning tool.

Insurance business synergies, economic growth and strategic planning

Previous research has found that life and non-life insurance business share significant relationships with economic growth. This current study extends that literature by being the first to investigate the synergistic relationship life and non-life insurance activities share with economic growth. We collect data that includes 84 national markets representing a broad spectrum of economic development over the 1994-2012 period and employ system-generalised method of moment (GMM) estimation technique based on a dynamic model structure. Our results support the hypothesis that life and non-life insurance synergies share a positive relationship with economic growth and that positive relationship experiences diminishing marginal returns as the insurance markets mature. The results of our study provide implications for policymakers with regard to market liberalisation strategies, as well as implications for the management of insurance companies contemplating foreign market expansion strategies.