Open Access(Re)insurance captives, efficiency and moral hazard. An attractive manner of risk financing and risk management for companies in certain circumstances
Author(s) -
Wim Weterings Weterings
Publication year - 2014
Publication title -
risk governance and control: financial markets and institutions
Language(s) - English
Resource type - Journals
eISSN - 2077-4303
pISSN - 2077-429X
DOI - 10.22495/rgcv4i1art1
Subject(s) - moral hazard , adverse selection , clarity , risk management , business , actuarial science , multinational corporation , insurance policy , risk financing , casualty insurance , finance , economics , incentive , financial risk management , microeconomics , biochemistry , chemistry
In this study the contribution is intended to provide more clarity and to demonstrate that under certain circumstances an insurance captive can have important efficiency effects and, among other things, a positive effect on moral hazard and adverse selection. For the purpose of acquiring more information on insurance captives and their operation, literature research was augmented by interviews conducted with the director of an insurance captive of a Dutch multinational, as well as with representatives from AON and Marsh, two major insurance brokers/consultancy firms in risk management that are often involved in the establishment and management of a captive.