New Findings on Risk Management from Temple University Summarized (The Reinsurance Network Among U.S. Property-Casualty Insurers: Microstructure, Insolvency Risk, and Contagion)

NewsRx Policy and Law Daily

2020 MAY 28 (NewsRx) -- By a News Reporter-Staff News Editor at NewsRx Policy and Law Daily -- New research on Risk Management is the subject of a report. According to news originating from Philadelphia, Pennsylvania, by NewsRx correspondents, research stated, “Reinsurance is the primary source of interconnectedness in the insurance industry. As such, reinsurance connectivity provides a transmission mechanism for financial shocks and potentially exposes insurers to contagion and systemic risk.”

Our news journalists obtained a quote from the research from Temple University, “In this article, connectivity within the U.S. property-casualty (P/C) reinsurance market is modeled as a network. We model the network of all primary insurers and reinsurers in the market. We analyze all bilateral reinsurance counterparty relationships (domestic and foreign) of U.S. P/C insurers, and we model both intra- and intergroup transactions. We extend the prior literature by providing a detailed examination of the reinsurance network structure, including network density, network components, centrality of individual insurers, and sub-network analysis for top insurers.”

According to the news editors, the research concluded: “Our analysis of contagion and insolvency risk reveals that even the failure of the top 10 in-degree or in-strength insurers with 100 percent loss given default would not lead to widespread insolvencies in the U.S. P/C insurance industry.”

For more information on this research see: The Reinsurance Network Among U.S. Property-Casualty Insurers: Microstructure, Insolvency Risk, and Contagion. Journal of Risk and Insurance, 2020;87(2):253-284. Journal of Risk and Insurance can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - http://www.wiley.com/; Journal of Risk and Insurance - http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1539-6975)

The news correspondents report that additional information may be obtained from H. Chen, Temple University, Philadelphia, PA 19122, United States. Additional authors for this research include J.D. Cummins, M.A. Weiss and T. Sun.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1111/jori.12269. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.