Tax-Deductible Pre-Event Catastrophe Loss Reserves: The Case of Florida.

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Milidonis, Andreas., and Martin Grace.
ASTIN Bulletin, 38 (1): 13-51.
Publication year: 2008
  • We examine the use of catastrophe loss reserves in a stylized one-period model of insurance.
  • First, we provide estimates of catastrophe loss distributions using data since 1949.
  • Second, we incorporate anticipated changes in consumer behavior due to the institution of catastrophe reserves.
  • Third, we discover large potential social welfare gains for a wide range of actuarial assumptions.