The Florida Hurricane Catastrophe Fund was officially created in November, 1993. This study analyzes investor reactions during the creation of the Florida Hurricane Catastrophe Fund. We find significant share price reactions for four of six legislative events consistent with the predictions of the theory outlined. We use both a generalized least squares portfolio approach and Corrado's (1989) rank statistic, a nonparametric event study methodology, to arrive at our findings. Empirical analysis of trading volume corroborates the findings involving share price reactions. We also find that the market is able to discriminate between property-liability insurers on the basis of hurricane exposure and firm size. Copyright Blackwell Publishers Ltd 2001.

No abstract

No abstract

No abstract

The authors examine the risk financing approach of the Florida state-sponsored property insurance programs. The programs rely heavily on post-disaster assessments on insurers to meet expected obligations. The authors evaluate the impact of the assessments and discuss whether this approach represents a realistic solution to the "cat problem."