Risk management has a central role in corporate America. Insurance companies frequently manage risk by purchasing reinsurance because it reduces the downside risk (i.e., bankruptcy risk) of an insurer. Because reinsurance is costly, Mayers and Smith (1990, Journal of Business, 63: 19-40) argue that reinsurance purchases should be negatively associated with the diversification of the owners' portfolios. Further, institutional owners play a significant role in equity markets yet we know little about their effect on firm behavior. The purpose of this study is to examine empirically the influence of institutional ownership on reinsurance for a sample of widely held property-liability insurers. We hypothesize that insurers with higher levels of institutional ownership purchase less reinsurance. Using a sample of 45 publicly traded property-liability insurers from 1995 to 1997, we demonstrate that the utilization of reinsurance decreases as the level of institutional ownership increases. This suggests that the diversification of the owners' portfolios is a determinant of the insurers' reinsurance decisions.

This research examines the decision to purchase earthquake insurance by analyzing data on earthquake insurance price and penetration in the New Madrid fault zone in Missouri. Earthquake risk is of concern to consumers, the insurance industry, industry regulators, and government agencies because of the potentially catastrophic nature of losses resulting from a major earthquake. Despite the significance of the earthquake peril, the recent literature does not contain estimates of the price and income elasticity of the demand for earthquake insurance. Our analysis indicates that homeowners acquire earthquake insurance because of risk considerations, at higher levels of risk the demand for earthquake insurance is higher, and the price of earthquake coverage does not provide incremental information in explaining the demand for earthquake coverage.

Quantitative analysis can be used to avoid subjective criteria in making a final selection decision.

OBJECTIVEType II odontoid fractures may be managed operatively or nonoperatively. If managed with bracing, bony union may never occur despite stability. This phenomenon is termed fibrous union. The authors aimed to determine associations with stable fibrous union and compare the morbidity of patients managed operatively and nonoperatively.METHODSThe authors performed a retrospective review of their spine trauma database for adults with type II odontoid fractures between 2015 and 2019. Two-sample t-tests and Fisher’s exact tests identified associations with follow-up stability and were used to compare operative and nonoperative outcomes. Sensitivity, specificity, and predictive values were calculated to validate initial stable upright cervical radiographs related to follow-up stability.RESULTSAmong 88 patients, 10% received upfront surgical fixation, and 90% were managed nonoperatively, of whom 22% had fracture instability on follow-up. Associations with instability after nonoperative management include myelopathy (OR 0.04, 95% CI 0.0–0.92), cerebrovascular disease (OR 0.23, 95% CI 0.06–1.0), and dens displacement ≥ 2 mm (OR 0.29, 95% CI 0.07–1.0). Advanced age was not associated with follow-up instability. Initial stability on upright radiographs was associated with stability on follow-up (OR 4.29, 95% CI 1.0–18) with excellent sensitivity and positive predictive value (sensitivity 89%, specificity 35%, positive predictive value 83%, and negative predictive value 46%). The overall complication rate and respiratory failure requiring ventilation on individual complication analysis were more common in operatively managed patients (33% vs 3%, respectively; p = 0.007), even though they were generally younger and healthier than those managed nonoperatively. Operative or nonoperative management conferred no difference in length of hospital or ICU stay, discharge disposition, or mortality.CONCLUSIONSThe authors delineate the validity of upright cervical radiographs on presentation in association with follow-up stability in type II odontoid fractures. In their experience, factors associated with instability included cervical myelopathy, cerebrovascular disease, and fracture displacement but not increased age. Operatively managed patients had higher complication rates than those managed without surgery. Fibrous union, which can occur with nonoperative management, provided adequate stability.

No abstract