@techreport{Laux2007Mutual,
abstract = {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 owner-manager 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.},
author = {Christian Laux and Alexander Muermann},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {G22; G32; 330; ownership structure; insurance; owner-manager conflict; capital; default; Versicherung , Privatversicherung , Eigent\"{u}merstruktur , Versicherungspr\"{a}mie , Eigenkapital , Betriebliche Liquidit\"{a}t , Theorie},
language = {eng},
number = {180},
title = {Mutual versus Stock Insurers : Fair Premium, Capital, and Solvency},
type = {Working paper series / Johann-Wolfgang-Goethe-Universit\"{a}t Frankfurt am Main, Fachbereich Wirtschaftswissenschaften : Finance & Accounting},
url = {http://hdl.handle.net/10419/23444},
year = {2007}
}
