It has been estimated that Hurricane Andrew caused more than $20 billion in damage in Florida and Louisiana in August 1992. Property-liability insurers will bear much of the loss payments to insureds. This study classifies the firms in the property-liability industry in terms of loss exposure and no loss exposure to determine if the market discriminated among insurers based on this risk. The results indicate that Hurricane Andrew produced a significant negative stock price reaction on property-liability insurers with direct premiums written in Florida or Louisiana. Unexposed firms sustained no significant price response. Thus, the results support the hypothesis that the market efficiently interpreted the information generated by the hurricane and discriminated among property-liability insurers based on the existence and magnitude of insurance written.
The Journal of Risk and Insurance publishes rigorous, original research in insurance economics and risk management. This includes the following areas of specialization: (1) industrial organization of insurance markets; (2) management of risks in the private and public sectors; (3) insurance finance, financial pricing, financial management; (4) economics of employee benefits, pension plans, and social insurance; (5) utility theory, demand for insurance, moral hazard, and adverse selection; (6) insurance regulation; (7) actuarial and statistical methodology; and (8) economics of insurance institutions. Both theoretical and empirical submissions are encouraged. Empirical work should provide tests of hypotheses based on sound theoretical foundations. JSTOR provides a digital archive of the print version of The Journal of Risk and Insurance. The electronic version of The Journal of Risk and Insurance is available at http://www.blackwell-synergy.com/servlet/useragent?func=showIssues&code;=jori. Authorized users may be able to access the full text articles at this site.
The American Risk and Insurance Association (ARIA) is a worldwide group of academic, professional, and regulatory leaders in insurance, risk management, and related areas, joined together to advance the study and understanding of the field. Founded in 1932, ARIA emphasizes research relevant to the operational concerns and functions of insurance and risk management professionals and provides resources, information, and support on important insurance and risk management issues. Two main goals of the organization are 1) to expand and improve academic instruction of risk management and insurance, and, 2) to encourage research on all significant aspects of risk management and insurance.
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