U.S. Life Insurers’ Responses to the Financial Crisis: A Review of the Research

14 Pages Posted: 8 Dec 2017

See all articles by Greg Niehaus

Greg Niehaus

University of South Carolina - Darla Moore School of Business

Chia-Chun Chiang

University of Texas at El Paso - College of Business Administration

Date Written: December 7, 2017

Abstract

Understanding how institutions were impacted by the financial crisis and how they responded is important for developing risk management plans that are capable of dealing with potential future crises. This paper therefore examines the impact of the financial crisis on U.S. life insurers and reviews the research on how life insurers responded to the crisis. Most life insurers were not significantly affected by the crisis, but some suffered large operating and investment losses. Regarding responses, the paper distinguishes activities that increased economic capital as well as statutory capital (e.g., cutting dividends and obtaining capital infusions) from activities that increased statutory capital without having a direct positive impact on economic capital (e.g., selling policies at a discount relative to fair value and selling securities at fire sale prices).

Suggested Citation

Niehaus, Greg and Chiang, Chia-Chun, U.S. Life Insurers’ Responses to the Financial Crisis: A Review of the Research (December 7, 2017). Journal of Financial Perspectives, Vol. 4, No. 1, 2017, Available at SSRN: https://ssrn.com/abstract=3084072

Greg Niehaus (Contact Author)

University of South Carolina - Darla Moore School of Business ( email )

College of Business Administration
Francis M. Hipp Building
Columbia, SC 29208
United States
803-777-7254 (Phone)
803-777-6876 (Fax)

Chia-Chun Chiang

University of Texas at El Paso - College of Business Administration ( email )

University Library - Acquisitions Department
500 West University Avenue
El Paso, TX 79968
United States

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