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- Title
EXPORT CREDIT INSURANCE: AUTHOR'S REPLY.
- Authors
Funatsu, Hideki
- Abstract
This article presents a reply to the comments made over the article about export credit insurance written by Hideki Funatsu published in the previous issue of "The Journal of Risk and Insurance," in the U.S. From the analysis made on the employment of non-proportional reimbursement method and the assumption of premium rate per dollar of coverage to be constant with both proportional and non-proportional methods, the author cites that although an optimal amount of coverage is the objective of an exporting firm in both cases, the actuarially fair price per dollar of coverage differs according to the type of the reimbursement method. In relation to the comments, the author agrees that the use of everywhere fair premium schedules for the non-proportional method yields results consistent with standard theorems in the theory of demand for insurance. However, in the context of export credit insurance, one can still argue that a government agency may well utilize linear pricing with the non-proportional reimbursement method. In addition, the author discusses three reasons in favor of a constant premium rate by utilizing some new insights gained from the comments made over the article.
- Subjects
CREDIT insurance; CREDIT insurance premiums; CREDIT insurance rates; ECONOMIC demand; EXPORT credit insurance; INSURANCE
- Publication
Journal of Risk & Insurance, 1988, Vol 55, Issue 4, p748
- ISSN
0022-4367
- Publication type
Article
- DOI
10.2307/253152