Abstract

http://ssrn.com/abstract=2043817
 


 



Do Typhoons Make Property-Liability Insurers’ Stock Prices Turbulent?


Takashi Yamasaki


Kobe University - Graduate School of Business Administration

March 14, 2014


Abstract:     
The aim of this paper is to clarify how natural disasters influence the stock prices of property-liability insurance companies. Examining a series of typhoons that made landfall in Japan, this study finds the following. First, the stock prices of property-liability insurers, on average, increase around typhoon landfalls. Second, a property-liability insurer’s stock price reacts more positively around typhoons that have greater precipitation and more negatively around typhoons with longer intervals from the previous typhoon landfall or that cause more serious residential damage. Third, a property-liability insurer’s stock price reacts according to its profitability or business efficiency. These results are consistent with the hypothesis that market reaction to property-liability insurers depends on whether the total amount of insurance claims from a natural disaster exceeds investors’ expectations of additional insurance demand.

Number of Pages in PDF File: 41

Keywords: stock performance, natural disaster, typhoon, event study, property-liability insurers, stock market

JEL Classification: G14, G15, G22

working papers series


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Date posted: April 22, 2012 ; Last revised: March 14, 2014

Suggested Citation

Yamasaki, Takashi, Do Typhoons Make Property-Liability Insurers’ Stock Prices Turbulent? (March 14, 2014). Available at SSRN: http://ssrn.com/abstract=2043817 or http://dx.doi.org/10.2139/ssrn.2043817

Contact Information

Takashi Yamasaki (Contact Author)
Kobe University - Graduate School of Business Administration ( email )
2-1 Rokkodai-cho
Nada-ku
Kobe, Hyogo 657-8501
Japan
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