On Corporate Insurance*

Authors: Richard MacMinn and James R. GARVEN (James_Garven@baylor.edu)

ABSTRACT.  Insurance contracts are regularly purchased by corporations and play an important role in the management of corporate risk. This role has received limited attention in the finance literature, even though insurance contracts are simply another type of financial contract in the nexus of contracts that comprise the corporation. This paper provides a model that is robust enough to allow for an investigation of the scope of insurance contracts in the management of corporate risk.

Keywords: agency costs, asymmetric taxes, contingent claims

*This article appears as chapter 16 (pp. 541-564) in Handbook of Insurance (Huebner International Series on Risk, Insurance and Economic Security Volume 22), edited by Georges Dionne, University of Montreal.


 
 

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