TY  - UNPD
A1  - Laux, Christian
A1  - Muermann, Alexander
T1  - Mutual versus stock insurers : fair premium, capital and solvency
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2006,26
N2  - Mutual insurance companies and stock insurance companies are different forms of organized risk sharing: policyholders and owners are two distinct groups in a stock insurer, while they are one and the same in a mutual. This distinction is relevant to raising capital, selling policies, and sharing risk in the presence of financial distress. Up-front capital is necessary for a stock insurer to offer insurance at a fair premium, but not for a mutual. In the presence of an ownermanager conflict, holding capital is costly. Free-rider and commitment problems limit the degree of capitalization that a stock insurer can obtain. The mutual form, by tying sales of policies to the provision of capital, can overcome these problems at the potential cost of less diversified owners. JEL Classification: G22, G32
T3  - CFS working paper series - 2006, 26 
KW  - Versicherungsverein auf Gegenseitigkeit
KW  - ownership structure
KW  - insurance
KW  - owner-manager conflict
KW  - capital
KW  - default
Y1  - 2006
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/1636
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-38003
IS  - Version October 2006
ER  -