The Impact of Introducing Insurance Guaranty Schemes on Pricing and Capital Structure

Détails

ID Serval
serval:BIB_785995B42A0A
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Titre
The Impact of Introducing Insurance Guaranty Schemes on Pricing and Capital Structure
Périodique
Journal of Risk and Insurance
Auteur(s)
Schmeiser H., Wagner J.
ISSN
0022-4367
Statut éditorial
Publié
Date de publication
2013
Peer-reviewed
Oui
Volume
80
Numéro
2
Pages
273-308
Langue
anglais
Résumé
The introduction of an insurance guaranty scheme can have significant influence on the pricing and capital structures in a competitive market. The aim of this article is to study this effect on competitive equity-premium combinations while considering a framework with policyholders and equity holders where guaranty fund charges are volume-based, as levied in existing schemes. Several settings with regard to the origin of the fund contributions are assessed and the immediate effects on the incentives of the policyholders and equity holders are analyzed through a one-period contingent claim approach. One result is that introducing a guaranty scheme in a market with competitive conditions entails a shift of equity capital towards minimum solvency requirements. Hence, adverse incentives may arise with regard to the overall security level of the industry.
Web of science
Création de la notice
04/07/2014 15:27
Dernière modification de la notice
20/08/2019 14:35
Données d'usage