Download or read book Capitalization of the Property-Liability Insurance Industry written by J David Cummins and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The 1990s witnessed an unprecedented decline in leverage ratios in the United States property-liability insurance industry. The premiums-to-surplus ratio, the most commonly used leverage ratio in the industry, fell from its historical average of 2.0 to less than 1.0 by the end of 2000; and the industry-wide capital-to-asset ratio increased from an historical average of about 25% to 35%. The international reinsurance industry also experienced significant capital increases and leverage declines during the 1990s (Cummins and Weiss, 2000) These unusual trends raised widespread concerns that the property-liability insurance industry had become over-capitalized (The Economist, 1999; Bowers, 2001; Seifert, 2001). To investigate the growth in capitalization and its potential causes, the Conference on Capitalization in the Property-Liability Insurance Industry was held at the Wharton School in September 2000 under the joint sponsorship of the Wharton Financial Institutions Center and AON. Selected papers from the conference comprise this issue of the Journal of Financial Services Research (JFSR).