Organizational form in the property-liability insurance industry
Journal
Journal of Risk and Insurance
Journal Volume
66
Journal Issue
2
Pages
253-273
Date Issued
1999
Author(s)
Regan L.
Abstract
The authors explore the relation between ownership form and distribution system and test the determinants of each element of organizational structure. Controlling for ownership form as an exogenous variable, the authors find that independent agency insurers are likely to be associated with stock ownership, are characterized by higher liabilities relative to surplus, and are more likely to specialize in complex lines of business. When ownership form is treated as an endogenous variable, however, no significant relation exists between ownership form and distribution system. When the same analysis is applied to the choice of ownership form, the authors find stock insurers are characterized by higher levels of firm risk, but again find no significant relationship between distribution and ownership when distribution system is treated as an endogenous variable. This suggests that these elements are related, but only indirectly through the effect of risk and complexity.
Type
journal article