Marine Insurance Liability: An Analysis of Mutuality vs. Fixed Premiums

This paper deals with the pricing differences between a mutual co-operative underwriting system and a fixed-premium underwriting system in providing coverage for marine liability. There has been much debate in recent years within the marine liability underwriting industry over which method fosters more competition, and hence, lower premiums for shipowners who are required to carry such coverage in order to operate. This paper will look at the current mutual marine insurance industry (Protection & Indemnity Associations or P&I Clubs) to compare its pricing both before and after the entry into the market of the fixed-premium underwriters, using data from 1985-2000 that encompasses both a major loss cycle and normal cyclical pricing variations. This analysis will hopefully provide information on whether mutual premium levels for the P&I Clubs differed substantially with the entry of the fixed-price competitors. This is important for the individual shipowners belonging to these mutual underwriting associations, because any variation in premium pricing could mean the potential for either great savings or tremendous losses.

Name thesis:degree_name

Master of Arts

Level thesis:degree_level

masters

Discipline thesis:degree_discipline

Economics

Department dc:contributor.department

Economics

Grantor dc:publisher

Virginia Tech

Year dc:date.issued

2002

Author dc:creator

• Spadafora, Stacy E.

Chair dc:contributor.committeechair

• Waud, Roger N.

Committee members dc:contributor.committeemember

• Lutton, Thomas J.
• Theroux, Richard

• fixed-rate premiums
• mutual premiums
• liability
• insurance

Statement dc:rights

• In Copyright

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Dc Identifier Other

etd-10022002-155605

OAI identifier oai:identifier

oai:vtechworks.lib.vt.edu:10919/35263