Before revision:  As is well-known  , if the Pareto exponent is larger than 1, then for the individual agent ( re-insurance company) diversification is beneficial, whereas when it is less than 1, concentration on a few objects is the better strategy.
After revision:  As is well-known , if the Pareto exponent is larger than 1, then for the individual agent ( reinsurance company) diversification is beneficial, whereas when it is less than 1, concentration on a few objects is the better strategy.