Corporate Demand for Insurance: An Empirical Analysis of the U.S. Market for Catastrophe and Non-Catastrophe Risks

Arbeitspapier

This paper tests some existing theories developed over the past 25 years on corporate demand for insurance. Using a unique dataset of 1,809 large U.S. corporations it provides the first empirical analysis that compares corporate demand for standard property insurance and for catastrophe coverage (here, terrorism). We find that larger companies are more likely to have some catastrophe coverage. Corporate demand for catastrophe insurance is found to be more price inelastic than insurance for non-catastrophe risks. This result differs from the findings on individual demand for insurance. The terrorism insurance premium per dollar of coverage is twice as high in the New York Metropolitan area than in the rest of the U.S. Yet the price elasticity of the demand for terrorism insurance is half in this area relative to the rest of the country.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers in Economics and Statistics ; No. 2009-10

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Theory ; Criteria for Decision-Making under Risk and Uncertainty ; Insurance; Insurance Companies; Actuarial Studies ; National Security and War
• Subject: Corporate decision making ; insurance ; terrorism ; Elementarschadenversicherung ; Nachfrage ; Politische Gewalt ; Naturkatastrophe ; Preiselastizität ; Entscheidung bei Unsicherheit ; Versicherungstechnisches Risiko ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Michel-Kerjan, Erwann ; Raschky, Paul A. ; Kunreuther, Howard C.
• Event: Veröffentlichung
• (who): University of Innsbruck, Department of Public Finance
• (where): Innsbruck
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/73523
• Last update: 10.03.2025, 11:43 AM CET