Market Discipline in Property/Casualty Insurance: Evidence from Premium Growth Surrounding Changes in Financial Strength Ratings
分析财产/意外保险公司财务实力评级变化前后的异常保费增长，发现评级下调当年及次年保费显著下降，商业保险降幅更大，低评级公司降幅更明显，且未发现道德风险。
Analysis of abnormal premium growth surrounding changes in financial strength ratings for a large panel of property/casualty insurers generally indicates significant premium declines in the year of and the year following rating downgrades. Consistent with greater risk sensitivity of demand, premium declines were concentrated among commercial insurance, which has narrower guaranty fund protection than personal insurance. Premium declines were greater for firms with low pre-downgrade ratings, and especially pronounced for firms falling below an Arating. There is no evidence of moral hazard in the form of rapid commercial or personal lines premium growth following downgrades of A-or low-rated insurers.