Risk-Taking and Performance of Public Insurers: An International Comparison

Journal of Risk and Insurance, Forthcoming

40 Pages Posted: 22 Mar 2012

See all articles by Paige Fields

Paige Fields

University of Kansas

Manu Gupta

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate

Puneet Prakash

Missouri State University

Multiple version iconThere are 2 versions of this paper

Date Written: Feb 2, 2012

Abstract

We investigate how investor protection, government quality, and contract enforcement affect risk-taking and performance of insurance companies from around the world. We find that better investor protection results in less risk-taking, as do higher quality government and greater contract enforceability. However, we find only limited evidence that these factors influence firm performance. We conclude that better overall operating environments result in less risk-taking by insurers without the concomitant decline in performance. These results imply that better investor protection environments benefit policyholders and outside stockholders by preventing corporate insiders from expropriating wealth from policyholders and outside stockholders.

Keywords: Risk-taking, Performance, Investor Protection, Government Quality

JEL Classification: G3, G22, G18, K22

Suggested Citation

Fields, Paige and Gupta, Manu and Prakash, Puneet, Risk-Taking and Performance of Public Insurers: An International Comparison (Feb 2, 2012). Journal of Risk and Insurance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2027666

Paige Fields

University of Kansas ( email )

1654 Naismith Dr.
Lawrence, KS 66045
United States

Manu Gupta (Contact Author)

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate ( email )

Richmond, VA 23284
United States

Puneet Prakash

Missouri State University ( email )

United States
65897 (Fax)

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