
Insurance and Insurance Markets
241
5.12 INSURER EFFICIENCY, DISTRIBUTION, ORGANIZATIONAL FORM,
AND CORPORATE GOVERNANCE
5.12.1 Efficiency Studies
Joskow’s (1973) seminal analysis of the U.S. property/casualty insurance industry con-
sidered market concentration and barriers to entry, estimated returns to scale, analyzed
direct writer (exclusive agency/salaried employee) and independent agency (multiple
insurer representation) distribution systems. Joskow estimated simple models of insurer
operating expense ratios, concluding that the industry was characterized by constant
returns to scale. Following Joskow, other early studies estimated insurers’ ...