The Supply of Catastrophe Insurance Under Regulatory Constraints

Klein and Kleindorfer provide a brief overview of the current extent of their research on this topic. The intent of this research is to empirically address interactions across the multiple stakeholders in the Catastrophe Insurance Business, i.e. homeowners, businesses, insurers, reinsurers, the construction and real estate sector, and regulatory institutions. Their analysis is aimed at addressing three questions: What is the structure and performance of the catastrophe insurance market? How do factors such as, interdependencies, profits, risk exposures, and distribution impact the performance of the market? What is the impact of regulation of this market on pricing adequacy, pricing precision, and financial risk? What is the current state of the market, and what future sustainable states of the market are possible? This paper is primarily devoted to describing what authors consider to be the structural drivers of supply and demand and the impact of regulatory controls. These drivers are: "Demand structure" (i.e. why consumers buy what they do) obviously contains several components. Items such as location, demography, price, policy features such as the presence of absence of bundling, "quality" effects such as perceived solvency and claims processes, and finally, how products are distributed, all impact consumer choice. In addition, consumers have other risk management options open to them, the most obvious being where to live, what type of construction to choose and what type of "mitigation", if any to employ. "Supply Structure" describes how the consumer business of insurance is conducted. Salient features would be the degree of competition, geography, profitability, solvency, exposure, loss costs, marketing costs, organizational form, financial structure, and regulatory/solvency constraints. Obviously, insurance companies attempt to maximize profits in the face of these variables "Regulatory Impact" on such things as pricing adequacy, pricing precision, and financial risk has important effects on all parties. In particular the freedom to manage ones risk exposure is critical to everyone from the individual consumer to the largest company, and regulation may produce. In an analysis to come later, the researchers will utilize detailed premium record data obtained from ISO on insurance transactions, supplemented by information on expected costs for different policies and risk characteristics. The data will, for the first time, provide and empirically grounded understanding of the supply and demand for CAT-related coverage provided in residential insurance policies. The study will seek to identify the factors that most affect supply and demand and the magnitudes of their relative effects, including the pricing of CAT coverage and alternative policy provisions.

The demand for homeowners insurance with bundled catastrophe coverages : Wharton project on managing catastrophic risks

In this paper, we estimate the demand for homeowner insurance in Florida. Since we are interested in a number of factors influencing demand, we approach the problem from two directions. We first estimate two hedonic equations representing the premium per contract and the price mark-up. We analyze how the contracts are bundled and how contract provisions, insurer characteristics and insured risk characteristics and demographics influence the premium per contract and the price mark-up. Second, we estimate the demand for homeowners insurance using two-stage least squares regression. We employ ISO's indicated loss costs as our proxy for real insurance services demanded. We assume that the demand for coverage is essentially a joint demand and thus we can estimate the demand for catastrophe coverage separately from the demand for noncatastrophe coverage. We determine that price elasticities are less elastic for catastrophic coverage than for non-catastrophic coverage. Further estimated income elasticities suggest that homeowners insurance is an inferior good. Finally, we conclude based on the results of a selection model that our sample of ISO reporting companies well represents the demand for insurance in the Florida market as a whole

The Demand for Homeowners Insurance with Bundled Catastrophe Coverage

This paper analyzes the demand for homeowners insurance in markets subject to catastrophe losses and where consumers have choices in configuring their coverage for catastrophe and non-catastrophe perils. We estimate the demand for homeowner insurance in Florida and New York using two-stage least squares regression with advisory indicated loss costs as our proxy for the quantity of real insurance services demanded. We decompose the demand for insurance into the demand for coverage of catastrophe perils (i.e., hurricanes or windstorms) and the demand for non-catastrophe coverage and estimate these demand functions separately. Our results are relatively consistent in New York and Florida, including evidence that catastrophe demand is more price elastic than non-catastrophe demand. We also find evidence that consumers value options that expand coverage, buy more insurance when it is subsidized through regulatory price constraints, and consider state guaranty fund provisions when purchasing insurance.

RSEARCH: Finding homologs of single structured RNA sequences

BACKGROUND: For many RNA molecules, secondary structure rather than primary sequence is the evolutionarily conserved feature. No programs have yet been published that allow searching a sequence database for homologs of a single RNA molecule on the basis of secondary structure. RESULTS: We have developed a program, RSEARCH, that takes a single RNA sequence with its secondary structure and utilizes a local alignment algorithm to search a database for homologous RNAs. For this purpose, we have developed a series of base pair and single nucleotide substitution matrices for RNA sequences called RIBOSUM matrices. RSEARCH reports the statistical confidence for each hit as well as the structural alignment of the hit. We show several examples in which RSEARCH outperforms the primary sequence search programs BLAST and SSEARCH. The primary drawback of the program is that it is slow. The C code for RSEARCH is freely available from our lab's website. CONCLUSION: RSEARCH outperforms primary sequence programs in finding homologs of structured RNA sequences

In Vitro Synthesis of Chlorophyll A in the Dark Triggers Accumulation of Chlorophyll A Apoproteins in Barley Etioplasts”

An in vitro translation system using lysed etioplasts was developed to test if the accumulation of plastid-encoded chlorophyll a apoproteins is dependent on the de novo synthesis of chlorophyll a. The P700 apoproteins, CP47 and CP43, were not radiolabeled in pulsechase translation assays employing lysed etioplasts in the absence of added chlorophyll precursors. When chlorophyllide a plus phytylpyrophosphate were added to lysed etioplast translation assays in the dark, chlorophyll a was synthesized and radiolabeled P700 apoproteins, CP47 and CP43, and a protein which comigrates with D1 accumulated. Chlorophyllide a or phytylpyrophosphate added separately to the translation assay in darkness did not induce chlorophyll a formation or chlorophyll a apoprotein accumulation. Chlorophyll a formation and chlorophyll a apoprotein accumulation were also induced in the lysed etioplast translation system by the photoreduction of protochlorophyllide to chlorophyllide a in the presence of exogenous phytylpyrophosphate. Accumulation of radiolabeled CP47 was detectable when very low levels of chlorophyll a were synthesized de novo (less than 0.01 nmol/10(7) plastids), and radiolabel increased linearly with increasing de novo chlorophyll a formation. Higher levels of de novo synthesized chlorophyll a were required prior to detection of radiolabel incorporation into the P700 apoproteins and CP43 (greater than 0.01 nmol/10(7) plastids). Radiolabel incorporation into the P700 apoproteins, CP47 and CP43, saturated at a chlorophyll a concentration which corresponds to 50% of the etioplast protochlorophyllide content (0.06 nmol of chlorophyll a/10(7) plastids)

Organizational Structure and the Diversification Discount: Evidence from Commercial Banking

"Journal of Industrial Economics, forthcoming."Includes bibliographical references."This version: August 6, 2008"This paper provides evidence on organizational structure, geographic diversification, and performance at bank holding companies (BHCs). First, we show that a BHC's member banks benefit from access to the parent organization's internal capital market. Second, we ask if the benefits of internal capital markets are best realized within loosely structured, decentralized organizations or more consolidated, centralized firms. We find that BHCs with many subsidiaries are less profitable and have lower q ratios than similar BHCs with fewer subsidiaries. However, because we study multi-unit firms in a single industry, our results suggest that the valuation discount reported in the diversification literature in empirical corporate finance reflects not only industry diversification, but also organizational structure

The status of the brown bear in Alaska

Presented at the 9th Alaska Science Conference, University of Alaska, College, September 5, 1958.Undertaken in part with Federal Aid to Wildlife Restoration Funds under Alaska Pittman-Robertson Project Number W-3-R