Abstract

http://ssrn.com/abstract=591544
 
 

References (63)



 
 

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The Determinants of Financial Health of Asian Insurance Companies


Renbao Chen


NUS Business School, National University of Singapore

Kie Ann Wong


National University of Singapore (NUS) - Department of Accounting


Journal of Risk and Insurance, Vol. 71, No. 3, pp. 469-499, September 2004

Abstract:     
Previous studies of financial health of insurance companies are mainly focused on insurers operating in the United States and developed economies. This article focuses on the solvency of general (property-liability) and life insurance companies in Asia using firm data and macro data separately. It uses different classification methods to classify the financial status of both general and life insurance companies. With the exception of Japan, failures of insurers in Singapore, Malaysia, and Taiwan are nonexistent. We find that, first, the factors that significantly affect general insurers' financial health in Asian economies are firm size, investment performance, liquidity ratio, surplus growth, combined ratio, and operating margin. Second, the factors that significantly affect life insurers' financial health are firm size, change in asset mix, investment performance, and change in product mix, but the last three factors are more applicable to Japan. Third, the financial health of insurance companies in Singapore seems to be significantly weakened by the Asian Financial Crisis. As the insurance industry in different Asian economies is at different stages of development, they require different regulatory guidelines.

Number of Pages in PDF File: 31

Accepted Paper Series


Date posted: September 15, 2004  

Suggested Citation

Chen, Renbao and Wong, Kie Ann, The Determinants of Financial Health of Asian Insurance Companies. Journal of Risk and Insurance, Vol. 71, No. 3, pp. 469-499, September 2004. Available at SSRN: http://ssrn.com/abstract=591544

Contact Information

Renbao Chen (Contact Author)
NUS Business School, National University of Singapore ( email )
1 Business Link
Singapore, 117592
Singapore
Kie Ann Wong
National University of Singapore (NUS) - Department of Accounting
1 Business Link
Singapore, 117592
Singapore
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