Property-Liability Insurance Company Market Pullout Announcements and Shareholder Wealth

Journal of Risk and Insurance, Vol. 64 No. 3, September 1997

Posted: 18 Mar 1998

See all articles by Michael J. McNamara

Michael J. McNamara

University of Memphis - Fogelman College of Business and Economics

Charlie Charoenwong

Nanyang Technological University (NTU)

Stephen W. Pruitt

affiliation not provided to SSRN

Robert A. Van Ness

University of Mississippi - Department of Finance

Abstract

This study presents an analysis of the wealth effects of property-liability insurance company market pullout announcements on the shareholders of both the withdrawing firms and their major competitors. The results of the study indicate that market withdrawals are positively interpreted by financial market participants, as the share prices of the withdrawing companies experience statistically significant risk-adjusted mean price increases of about one percent. On average, there is little evidence that market withdrawals adversely affect major competitors of the withdrawing insurance companies.

JEL Classification: G22

Suggested Citation

McNamara, Michael J. and Charoenwong, Charlie and Pruitt, Stephen W. and Van Ness, Robert A., Property-Liability Insurance Company Market Pullout Announcements and Shareholder Wealth. Journal of Risk and Insurance, Vol. 64 No. 3, September 1997, Available at SSRN: https://ssrn.com/abstract=50741

Michael J. McNamara

University of Memphis - Fogelman College of Business and Economics ( email )

Memphis, TN 38152
United States
901-678-2436 (Phone)

Charlie Charoenwong

Nanyang Technological University (NTU) ( email )

Nanyang Business School, BF Division
S3-01c-104
Singapore, 639798
Singapore
+65 6790 4799 (Phone)
+65 6791 3697 (Fax)

Stephen W. Pruitt (Contact Author)

affiliation not provided to SSRN

No Address Available

Robert A. Van Ness

University of Mississippi - Department of Finance ( email )

Oxford, MS 38677
United States

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