Abstract This paper studies the connection between risk-sharing and organizational form. It models the organizational form decision as a trade-off between the superior capital market access of the stock form and a regulatory or agency advantage held by the mutual form. When capital is expensive, consumers will substitute away from paying investors to supply risk-bearing capital and toward bearing more risk through mutual companies. The theory is supported with evidence from the Pennsylvania fire insurance market in 1874-1909. During this period, use of the mutual form moved in tandem with the insurance underwriting cycle
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