An investigation of the performance of the US property-liability insurance industry

This article presents an empirical analysis of the economic performance of the U.S. property-liability insurance industry, using estimations across 18 lines of insurance for the years 1984 through 1993. It adopts an industrial organization approach, focusing on the economic loss ratio as a measure of pricing performance. The concentration ratio for the line and the share of direct writers in the line are both found to be significant determinants of performance. The results are consistent with shortcomings in competition in some insurance lines.