Document Type
Discussion Paper
Publication Date
6-1-1999
CFDP Number
1227
CFDP Pages
47
Abstract
There is a natural tradeoff between the benefits of increasing the number of competitors in an insurance market and the drawback to the weakening of the law of large numbers due to the diminishing of average reserves. In this investigation we consider the possibility for optimal layers of reinsurance and retrocession in the design of the insurance industry. A general question which may be asked of all financial institutions is what factors limit the number of layers of paper which can be constructed?
Recommended Citation
Powers, Michael R. and Shubik, Martin, "Toward a Theory of Reinsurance and Retrocession" (1999). Cowles Foundation Discussion Papers. 1475.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/1475