TY - JOUR AU - Born, Patricia AU - Gentry, William M AU - Viscusi, W. Kip AU - Zeckhauser, Richard J TI - Organizational Form and Insurance Company Performance: Stocks versus Mutuals JF - National Bureau of Economic Research Working Paper Series VL - No. 5246 PY - 1995 Y2 - September 1995 DO - 10.3386/w5246 UR - http://www.nber.org/papers/w5246 L1 - http://www.nber.org/papers/w5246.pdf N1 - Author contact info: Patricia H. Born 821 Academic Way Tallahassee, FL 32306 E-Mail: pborn@business.fsu.edu William M. Gentry Department of Economics Williams College Morey House Williamstown, MA 01267 Tel: 413-597-4257 Fax: 413-597-4045 E-Mail: William.M.Gentry@williams.edu W. Kip Viscusi Vanderbilt Law School 131 21st Avenue South Nashville, TN 37203-1181 Tel: 615/343-7715 E-Mail: kip.viscusi@vanderbilt.edu Richard J. Zeckhauser John F. Kennedy School of Government Harvard University 79 John F. Kennedy Street Cambridge, MA 02138 Tel: 617/495-1174 Fax: 617/384-9340 E-Mail: richard_zeckhauser@harvard.edu M1 - published as Patricia Born, William M. Gentry, W. Kip Viscusi, Richard J. Zeckhauser. "Organizational Form and Insurance Company Performance: Stocks versus Mutuals," in David F. Bradford, editor, "The Economics of Property-Casualty Insurance" University of Chicago Press (1998) AB - One unusual feature of the U.S. property-casualty insurance industry is the coexistence of stock and mutual companies. This paper explores the performance of these forms in the industry through a dynamic assessment of how mutual and stock insurance companies respond to differences in their underwriting environment. Agency theories suggest that the stock company may be more 'opportunistic' and less obligated to their insureds than mutuals. This article assesses the responses by stock and mutual firms to changes in the underwriting environment from 1984 to 1991, using measures of individual firms' performance, by state and by line, in eight different lines of insurance. Stock companies are more likely than mutuals to reduce their business in unprofitable situations, and have higher losses than mutuals for a given amount of premiums. ER -