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

The Shareholder Wealth Effects of Insurance Securitization: Preliminary Evidence from the Catastrophe Bond Market

Insurance securitization has long been hailed as an important tool to increase the underwriting capacity for companies exposed to catastrophe-related risks. However, global volumes of insurance securitization have remained surprisingly low to date which raises questions over its benefits. In this paper, we examine changes in the market value of insurance and reinsurance firms which announce their engagement in insurance securitization by issuing catastrophe (Cat) bonds. Consistent with the hitherto underwhelming contribution of Cat bonds to global catastrophe coverage, we do not find evidence that Cat bonds lead to strong wealth gains for shareholders in the issuing firm. More importantly, we report large variations in the distribution of wealth effects in response to the issue announcement. We show that the wealth effects for shareholders in firms which issue Cat bonds appear to be driven by explanations according to which Cat bonds offer cost savings relative to other forms of catastrophe risk management (and less by the potential of Cat bonds to hedge catastrophe risk). Thus, abnormal returns are particularly large for issues by firms which face low levels of loss uncertainty (which reduces the information acquisition costs in financial markets) as well as for issues during periods when prices for catastrophe coverage (including Cat bonds) are low

Data envelopment analysis in financial services: a citations network analysis of banks, insurance companies and money market funds

Development and application of the data envelopment analysis (DEA) method, have been the subject of numerous reviews. In this paper, we consider the papers that apply DEA methods specifically to financial services, or which use financial services data to experiment with a newly introduced DEA model. We examine 620 papers published in journals indexed in the Web of Science database, from 1985 to April 2016. We analyse the sample applying citations network analysis. This paper investigates the DEA method and its applications in financial services. We analyse the diffusion of DEA in three sub-samples: (1) banking groups, (2) money market funds, and (3) insurance groups by identifying the main paths, that is, the main flows of the ideas underlying each area of research. This allows us to highlight the main approaches, models and efficiency types used in each research areas. No unique methodological preference emerges within these areas. Innovations in the DEA methodologies (network models, slacks based models, directional distance models and Nash bargaining game) clearly dominate recent research. For each subsample, we describe the geographical distribution of these studies, and provide some basic statistics related to the most active journals and scholars

Varicella-Zoster viruses associated with post-herpetic neuralgia induce sodium current density increases in the ND7-23 Nav-1.8 neuroblastoma cell line

Post-herpetic neuralgia (PHN) is the most significant complication of herpes zoster caused by reactivation of latent Varicella-Zoster virus (VZV). We undertook a heterologous infection in vitro study to determine whether PHN-associated VZV isolates induce changes in sodium ion channel currents known to be associated with neuropathic pain. Twenty VZV isolates were studied blind from 11 PHN and 9 non-PHN subjects. Viruses were propagated in the MeWo cell line from which cell-free virus was harvested and applied to the ND7/23-Nav1.8 rat DRG x mouse neuroblastoma hybrid cell line which showed constitutive expression of the exogenous Nav 1.8, and endogenous expression of Nav 1.6 and Nav 1.7 genes all encoding sodium ion channels the dysregulation of which is associated with a range of neuropathic pain syndromes. After 72 hrs all three classes of VZV gene transcripts were detected in the absence of infectious virus. Single cell sodium ion channel recording was performed after 72 hr by voltage-clamping. PHN-associated VZV significantly increased sodium current amplitude in the cell line when compared with non-PHN VZV, wild-type (Dumas) or vaccine VZV strains ((POka, Merck and GSK). These sodium current increases were unaffected by acyclovir pre-treatment but were abolished by exposure to Tetrodotoxin (TTX) which blocks the TTX-sensitive fast Nav 1.6 and Nav 1.7 channels but not the TTX-resistant slow Nav 1.8 channel. PHN-associated VZV sodium current increases were therefore mediated in part by the Nav 1.6 and Nav 1.7 sodium ion channels. An additional observation was a modest increase in message levels of both Nav1.6 and Nav1.7 mRNA but not Nav 1.8 in PHN virally infected cells

Functional kinds: a skeptical look

The functionalist approach to kinds has suffered recently due to its association with law-based approaches to induction and explanation. Philosophers of science increasingly view nomological approaches as inappropriate for the special sciences like psychology and biology, which has led to a surge of interest in approaches to natural kinds that are more obviously compatible with mechanistic and model-based methods, especially homeostatic property cluster theory. But can the functionalist approach to kinds be weaned off its dependency on laws? Dan Weiskopf has recently offered a reboot of the functionalist program by replacing its nomological commitments with a model-based approach more closely derived from practice in psychology. Roughly, Weiskopf holds that the natural kinds of psychology will be the functional properties that feature in many empirically successful cognitive models, and that those properties need not be localized to parts of an underlying mechanism. I here skeptically examine the three modeling practices that Weiskopf thinks introduce such non-localizable properties: fictionalization, reification, and functional abstraction. In each case, I argue that recognizing functional properties introduced by these practices as autonomous kinds comes at clear cost to those explanations’ counterfactual explanatory power. At each step, a tempting functionalist response is parochialism: to hold that the false or omitted counterfactuals fall outside the modeler’s explanatory aims, and so should not be counted against functional kinds. I conclude by noting the dangers this attitude poses to scientific disagreement, inviting functionalists to better articulate how the individuation conditions for functional kinds might outstrip the perspective of a single modeler

Activation of mTOR coincides with autophagy during ligation-induced atrophy in the rat submandibular gland

Salivary gland atrophy is a common consequence of pathology, including Sjögren's syndrome, irradiation therapy and obstructive sialadenitis. During severe atrophy of the rat submandibular gland caused by excretory duct ligation, the majority of acinar cells disappear through apoptosis, whereas ductal cells proliferate and dedifferentiate; yet, the gland can survive in the atrophic state almost indefinitely, with an ability to fully recover if deligated. The control mechanisms governing these observations are not well understood. We report that ∼10% of acinar cells survive in ligation-induced atrophy. Microarray and quantitative real-time PCR analysis of ligated glands indicated sustained transcription of acinar cell-specific genes, whereas ductal-specific genes were reduced to background levels. After 3 days of ligation, activation of the mammalian target of rapamycin (mTOR) pathway and autophagy occurred as shown by phosphorylation of 4E-BP1 and expression of autophagy-related proteins. These results suggest that activation of mTOR and the autophagosomal pathway are important mechanisms that may help to preserve acinar cells during atrophy of salivary glands after injury