The Network Structure and Systemic Risk in the Global Non-Life Insurance Market

The Reinsurance Network Among U.S. Property–Casualty Insurers: Microstructure, Insolvency Risk, and Contagion

“…A growing literature uses network theory to model linkages among financial institutions. The banking system has been most extensively analyzed (European Central Bank, ; Hasman, ; Minoiu and Reyes, ), and the literature has expanded to other financial markets, such as credit default swaps (CDS) (Markose, Giansante, and Shaghaghi, ; Getmansky, Girardi, and Lewis, ) and global insurance markets (Billio et al, ; Kanno, ).…”

“…Kanno () uses network analysis to analyze systemic risk in the global nonlife insurance market from 2006 to 2013. Using data from the ISIS insurance database compiled by Bureau van Dijk, he finds systemic risk in the global nonlife market to be minimal.…”

A note on risk and value from an underutilized dataset: Consolidated disclosures

“…There are relatively few studies of insurers that analyze consolidated data. Examples are Napompech, Kroll, and Shelor (2002) who measure agency costs associated with a mutual insurer converting to stock; Born, Giaccotto and Ritsatos (2004) who examine the value created by stock repurchases of insurance firms; Shortridge and Avila (2004) who examine the impact of an insurer's institutional ownership on its use of reinsurance; Kanno (2016) who examines the structure of intercompany networks across the global insurance industry; and Scordis (2019) who identifies value drivers for PC insurance firms. It is proper, then, to consider what data one should use since what data are appropriate depends on what hypotheses one wishes to investigate within the risk‐value dynamic of an insurer.…”

“…Such pricing cascade evolves because a successful reinsurance placement requires cooperation among several risk bearers in order to establish price, coverage tranches and tranche seniority. In fact, the analysis of Kanno (2016) suggests that there is a stable network that interconnects insurers around the globe. Kanno (2016), who uses consolidated data, finds that a handful of reinsurers interconnect the industry through their linkages to primary insurers and to each other.…”

“…In fact, the analysis of Kanno (2016) suggests that there is a stable network that interconnects insurers around the globe. Kanno (2016), who uses consolidated data, finds that a handful of reinsurers interconnect the industry through their linkages to primary insurers and to each other. While reinsurers compete over market share and profits, they maintain this network as they also prioritize long-term relationships with their clients (Jarzabkwoski, Bednarek & Sprre, 2015).…”