The Effects of Insurance Company Mergers on Risk: A Note

Journal Of Business And Economic Perspectives, Vol. 19, Fall/Winter 1993

Posted: 27 Mar 1999

See all articles by Stephen F. Borde

Stephen F. Borde

University of Central Florida - College of Business Administration

Jeff Madura

Florida Atlantic University - College of Business

Francis W. Wright

Florida Atlantic University

Abstract

Insurance company risk is assessed after their acquisitions. An acquisition may increase risk if it is a strategic mismatch, or an acquisition may reduce risk through cash flow diversification. Over thirty-six month periods surrounding insurance company acquisitions, systematic risk changes are examined. Results of this study suggest that no significant shifts in risk are likely to occur, which implies that acquisitions ought not to be pursued for the sole purpose of risk reduction. Instead, acquisitions should be driven by other potential benefits.

Note: This is a description of the paper and is not the actual abstract.

JEL Classification: G00, G10, G20, G22, G30, G31,G34

Suggested Citation

Borde, Stephen F. and Madura, Jeff and Wright, Francis W., The Effects of Insurance Company Mergers on Risk: A Note. Journal Of Business And Economic Perspectives, Vol. 19, Fall/Winter 1993, Available at SSRN: https://ssrn.com/abstract=154229

Stephen F. Borde (Contact Author)

University of Central Florida - College of Business Administration ( email )

PO Box 161400
Orlando, FL 32816
United States
407-823-2977 (Phone)
407-823-6676 (Fax)

Jeff Madura

Florida Atlantic University - College of Business ( email )

University Tower
220 SE 2 Avenue
Fort Lauderdale, FL 33301
United States
(954)762-5632 (Phone)
(954)762-5245 (Fax)

Francis W. Wright

Florida Atlantic University

Boca Raton, FL 33431
United States

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