Underwriting cycles in Asia

This study examines the presence and causes of the underwriting cycle in As ia. It also compares the characteristics of the underwriting cycle in emerg ing markets in Asia with its characteristics in developed markets. We found that, first, second order autoregression results support the existence of the underwriting cycle in Asia. Second the analysis of premium changes prov ides some support for the rational expectations/institutional intervention hypothesis. Third, although there is little evidence to prove that the stoc k markets and interest rates have caused the cycle in Asia, the results see m to indicate that the underwriting cycles in Asian countries are mainly re lated to the pace of the economic growth in those countries. Fourth, our re sults with respect to the factors affecting the changes in premiums general ly differ from those found for the developed nations.