The Optimal Time to Merge Two First-Line Insurers with Proportional Reinsurance Policies

<div>The effect of <svg height="9.39034pt" id="M187" style="vertical-align:-3.42943pt" version="1.1" viewbox="-0.0498162 -5.96091 11.1659 9.39034" width="11.1659pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M471 401C471 442 455 448 440 448C421 448 389 439 366 424C314 390 233 331 165 242H163L187 345C193 372 197 393 197 409C197 435 189 448 174 448C146 448 80 408 23 349L40 327C64 351 97 373 107 373C115 373 118 366 111 337L29 -4L36 -12C56 -4 83 3 110 9C123 69 136 126 150 172C227 283 336 381 377 381C392 381 396 370 379 298L326 74C290 -77 273 -172 273 -197C273 -219 316 -261 346 -261L353 -246C348 -227 352 -174 374 -66L457 310C467 352 471 381 471 401Z"></path></g><g transform="matrix(.0091,0,0,-0.0091,6.097,3.132)"><path d="M389 0V32C297 38 291 46 291 118V635C234 613 175 595 109 583V556L161 554C203 552 207 547 207 497V118C207 46 201 38 110 32V0H389Z"></path></g></svg> on <svg height="12.4698pt" id="M188" style="vertical-align:-3.18147pt" version="1.1" viewbox="-0.0498162 -9.28833 15.9926 12.4698" width="15.9926pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M480 416C480 431 465 448 438 448C388 448 312 383 252 330C217 299 188 273 155 237H153L257 680C262 700 263 712 253 712C240 712 183 684 97 674L92 648L126 647C166 646 172 645 163 606L23 -6L29 -12C51 -5 77 2 107 8C115 62 130 128 142 180C153 193 179 220 204 241C231 170 259 106 288 54C317 0 336 -12 358 -12C381 -12 423 2 477 80L460 100C434 74 408 54 398 54C385 54 374 65 351 107C326 154 282 241 263 299C296 332 351 377 403 377C424 377 436 372 445 368C449 366 456 368 462 375C472 386 480 402 480 416Z"></path></g><g transform="matrix(.0091,0,0,-0.0091,6.474,3.132)"><path d="M389 0V32C297 38 291 46 291 118V635C234 613 175 595 109 583V556L161 554C203 552 207 547 207 497V118C207 46 201 38 110 32V0H389Z"></path></g><g transform="matrix(.0091,0,0,-0.0091,10.906,3.132)"><path d="M414 144C384 79 371 75 317 75H135L276 221C367 316 408 376 408 465C408 570 327 635 237 635C179 635 131 609 100 575L42 494L67 471C94 510 138 565 205 565C277 565 321 517 321 435C321 348 258 270 195 195C146 137 88 81 33 26V0H411C423 44 433 88 446 135L414 144Z"></path></g></svg> and <span class="nowrap"><svg height="12.5794pt" id="M189" style="vertical-align:-3.29107pt" version="1.1" viewbox="-0.0498162 -9.28833 14.449 12.5794" width="14.449pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M480 416C480 431 465 448 438 448C388 448 312 383 252 330C217 299 188 273 155 237H153L257 680C262 700 263 712 253 712C240 712 183 684 97 674L92 648L126 647C166 646 172 645 163 606L23 -6L29 -12C51 -5 77 2 107 8C115 62 130 128 142 180C153 193 179 220 204 241C231 170 259 106 288 54C317 0 336 -12 358 -12C381 -12 423 2 477 80L460 100C434 74 408 54 398 54C385 54 374 65 351 107C326 154 282 241 263 299C296 332 351 377 403 377C424 377 436 372 445 368C449 366 456 368 462 375C472 386 480 402 480 416Z"></path></g><g transform="matrix(.0091,0,0,-0.0091,6.474,3.132)"><path d="M781 91L765 118C733 86 702 70 693 70C686 70 685 77 692 106L738 297C772 439 736 451 712 451S675 445 647 431C605 410 526 356 452 257H450L459 294C491 426 459 451 429 451C403 451 386 445 361 431C312 404 239 343 170 253H168L188 333C208 411 205 451 175 451C148 451 85 417 24 346L39 318C57 338 100 374 112 374C120 374 122 372 115 339C91 226 62 112 28 -6L37 -12C59 -4 87 3 114 6C125 68 142 127 154 168C184 227 316 383 372 383C397 383 396 366 381 289C362 192 338 92 312 -6L317 -12C339 -5 367 3 396 6L434 170C468 234 598 383 650 383C668 383 676 369 664 319L609 90C593 23 600 -12 629 -12C654 -12 722 23 781 91Z"></path></g></svg>.</span></div>

Mathematical Problems in Engineering

fig2

Figure 2

Figure 2: The Optimal Time to Merge Two First-Line Insurers with Proportional Reinsurance Policies 