Citation

Pfeffer I. J. Risk Insur. 1974; 41(1): 41-56.

Copyright

(Copyright © 1974, American Risk and Insurance Association, Publisher John Wiley and Sons)

DOI

10.2307/252091

PMID

unavailable

Abstract

This article provides a comparative analysis of the insurance industry treatment of the "hard to place" or residual risk in various European countries as contrasted with the approaches employed in the United States. Based on a study of current practice and experience in all major western European countries, the principal finding is that there does not appear to be a residual market problem because of socioeconomic and political factors. Criteria employed in the analysis include urban blight, law enforcement, cultural homogeneity, equity ownership in durables, character of insurance regulation, government-industry co-operation, insurer density, market penetration by agents, government indemnities for catastrophic disasters, degree of consumerism, refinement of underwriting classifications and availability of voluntary pools for special risks. The article concludes that the residual risk problem can be removed from the public domain by cooperative action to grant insurance to all prospects with redistribution of the risk by means of reinsurance.