Underwriting Apophenia and Cryptids: Are Cycles Statistical Figments of our Imagination?

This paper re-examines the evidence in favour of the existence of underwriting cycles in property and casualty insurance and their economical significance. Using a meta-analysis of published papers in the area of insurance economics, we show that the evidence supporting the existence of underwriting cycles is misleading. There is, in fact, little evidence in favour of insurance cycles with a linear autoregressive character. This means that any cyclicality in firm profitability in the property and casualty insurance industry is not predictable in a classical econometric framework. It follows that pricing in the property and casualty insurance industry is not incompatible with that of a competitive market

Risk Taking in the Domain of Losses: Experiments in Several Countries.

This paper presents an experimental investigation of risk taking in the domain of losses. The experiments are conducted with students in several universities during introduction rudiments to expected utility theory and risk behaviour. The results are partly compatible with expected utility theory, assuming an inflection point in the utility function overlosses. They also show similarities in the risk perception of students across different countries, i.e., a useful validation of human behaviour in an international context.RISK ; ECONOMICS ; EXPERIMENTS