U.S. Reinsurance Prices, Financial Quality, and Global Capacity

The puzzle of underwriting cycles and insurance crises in property‐liability insurance has led to numerous economic hypotheses and analyses, yet no single theory seems capable of explaining all of its aspects. Reinsurance is hypothesized to be a potential factor in observed cycles in the primary market; despite this, few underwriting cycle studies focus on reinsurance. The purpose of this research is to investigate determinants of reinsurance prices in the U.S. Nonproportional reinsurance is highlighted, since it is designed to cover the tail of the loss distribution and is considered to be relatively riskier than proportional reinsurance as a result. Separate samples of professional U.S. reinsurers for property and for casualty are studied, based upon the reinsurers' writings of property versus casualty nonproportional reinsurance. The sample period is 1991–1995. The results support both the capacity constraint hypothesis and the risky debt hypothesis, and this is the first research to support both. A major innovation in this study is the use of capacity variables that are broken down by major region of the world.     

How to ensure supplier quality from your supplier management program

Companies are currently abandoning vertical integration in order to focus on their core competencies and capabilities. As a result, higher percentages of their products are being provided by suppliers. In today's global marketplace, customers can demand and receive products that possess excellent quality. In order to remain competitive, companies must be able to provide high-quality products at low prices. The quality of components purchased from suppliers influences product quality more than any other factor except design quality, and since purchased materiel make up such a large percentage of a company's product, ensuring supplier quality has become an economic imperative.