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Competing Models of Organizational Form: Risk Management Strategies and Underwriting Profitability in the Swedish Fire Insurance Market Between 1903 and 1939

Published online by Cambridge University Press:  14 December 2012

Michael Adams ,
Lars Fredrik Andersson ,
Magnus Lindmark  and
Elena Veprauskaite
Michael Adams*
Affiliation:
Professor, School of Management, University of Bath, Bath BA2 7AY, United Kingdom. E-mail: [email protected].
Lars Fredrik Andersson*
Affiliation:
Associate Professor, Department of Geography and Economic History, Umeå University, SE-901 87 Umeå, Sweden. E-mail: [email protected].
Magnus Lindmark*
Affiliation:
Professor, Department of Geography and Economic History, Umeå University, SE-901 87 Umeå, Sweden. E-mail: [email protected].
Elena Veprauskaite*
Affiliation:
Grant Thornton Research Fellow in Strategic Risk Management, School of Management, University of Bath, Bath BA2 7AY, United Kingdom. E-mail: [email protected].
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Abstract

Mutual and stock insurers have coexisted and competed against each other in insurance markets for centuries. In this article, we examine the risk management strategies and underwriting profitability of the different organizational forms in Sweden's property fire insurance market between 1903 and 1939. We demonstrate that stock insurers acted as intermediaries between policyholders and reinsurers to operate effectively in the potentially high-risk segments of the fire insurance market. In contrast, nationwide mutual insurers kept larger reserves to balance fluctuations in claims experiences, while local insurance pools relied on social obligation and trust to mobilize capital after adverse fire events.

Type
ARTICLES
Information
The Journal of Economic History , Volume 72 , Issue 4 , 14 December 2012 , pp. 990 - 1014
Copyright
Copyright © The Economic History Association 2012

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