The Ownership Complaint Gap: Mutual vs. Stock Intermediaries

46 Pages Posted: 16 Feb 2019

See all articles by Jiang Cheng

Jiang Cheng

Lingnan University

Wenlan Qian

HKU Business School; National University of Singapore - NUS Business School

David M. Reeb

National University of Singapore

Date Written: February 6, 2019


We document a substantial customer complaint gap between stock and mutual financial firms. To assess whether this 21% per year complaint gap stems from complaint-prone customers in stock insurers, we examine state-adjudicated complaint success. To further delineate between customer selection or treatment explanations, we exploit within insurer complaints around random claims (natural disasters) and attention shocks (media scrutiny). Further tests reveal the complaint gap widens with greater competition, near insolvency thresholds, and with more price regulation. Overall, the results are inconsistent with the hypothesis that mutual financial firms exhibit low customer satisfaction, suggesting customers find this a beneficial organizational structure.

Keywords: Organizational Structure; Insurance; Regulation; Consumer Complaints; Financial Intermediary; Ownership; Consumer Financial Protection; Property-Casualty; Claim Delay; Claim Denial

JEL Classification: G32; G22; L22; D18; K23

Suggested Citation

Cheng, Jiang and Qian, Wenlan and Reeb, David M., The Ownership Complaint Gap: Mutual vs. Stock Intermediaries (February 6, 2019). Available at SSRN: or

Jiang Cheng

Lingnan University ( email )

8 Castle Peak Road
Lingnan University
Hong Kong, New Territories

Wenlan Qian

HKU Business School ( email )

Pokfulam Road
Hong Kong, Pokfulam HK


National University of Singapore - NUS Business School ( email )

15 Kent Ridge Drive
Singapore 117592, 119245
(65) 65163015 (Phone)

David M. Reeb (Contact Author)

National University of Singapore ( email )

Mochtar Riady Building
15 Kent Ridge Drive
Singapore, 119245


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