Researchers’ Work from Florida State University Focuses on Insurance (Are Health Insurers In Multiple Lines of Business Less Profitable? an Examination of Scope Economies In Health Insurance): Insurance

2022 DEC 20 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Current study results on Insurance have been published. According to news reporting from Tallahassee, Florida, by NewsRx journalists, research stated, “In markets where companies can offer multiple products or services, production costs may decline, and profitability may increase as business scope expands. Using a sample of health insurers from 2015 to 2018 with data reported in the annual NAIC Supplemental Health Care Exhibit, we test whether scope economies exist among health insurers.”

The news correspondents obtained a quote from the research from Florida State University, “We evaluate the relationship between scope and four profitability metrics-the medical loss ratio, the expense ratio, the underwriting profit ratio, and a profit efficiency measure obtained using a data envelopment analysis technique. We test two competing hypotheses from prior literature on scope economies in insurance. The strategic focus hypothesis states performance is higher for insurers that specialize in one line of business. The conglomeration hypothesis states performance is higher for insurers that operate in multiple lines of business.”

According to the news reporters, the research concluded: “Our results provide evidence in support of the strategic focus hypothesis among US health insurers.”

This research has been peer-reviewed.

For more information on this research see: Are Health Insurers In Multiple Lines of Business Less Profitable? an Examination of Scope Economies In Health Insurance. Journal of Risk and Insurance, 2022. 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)

Our news journalists report that additional information may be obtained by contacting Patricia Born, Florida State University, Dept Rmi Real Estate & Legal Studies, Tallahassee, FL, United States. Additional authors for this research include Amanda Cook, Tice Sirmans and Charles Yang.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1111/jori.12408. 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.

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