Fair Values of Equity and Debt Securities and Share Prices of Property-Liability Insurers

J. OF RISK AND INSURANCE, Vol. 62 No. 4, December 1995

Posted: 26 May 1998

See all articles by Kathy R. Petroni

Kathy R. Petroni

Michigan State University - Eli Broad College of Business and Eli Broad Graduate School of Management

James Michael Wahlen

Indiana University - Kelley School of Business - Department of Accounting

Abstract

This study analyzes the relation between fair values of equity and fixed maturity debt securities and share prices of property-liability insurers. We find that property- liability share prices can be explained by fair values of equity investments and U.S. Treasury investments, even after controlling for historical costs. Fair value disclosures for other types of investment securities (e.g., municipal and corporate bonds) do not explain share prices beyond historical costs. Our results suggest that the reliability of fair value estimates for different types of securities affects the value-relevance of related disclosures.

JEL Classification: G22

Suggested Citation

Petroni, Kathy Ruby and Wahlen, James Michael, Fair Values of Equity and Debt Securities and Share Prices of Property-Liability Insurers. J. OF RISK AND INSURANCE, Vol. 62 No. 4, December 1995. Available at SSRN: https://ssrn.com/abstract=7007

Kathy Ruby Petroni

Michigan State University - Eli Broad College of Business and Eli Broad Graduate School of Management ( email )

East Lansing, MI 48824-1121
United States
517-432-2924 (Phone)
517-432-1101 (Fax)

James Michael Wahlen (Contact Author)

Indiana University - Kelley School of Business - Department of Accounting ( email )

1309 E. 10th Street
Bloomington, IN 47405
United States
812-855-2658 (Phone)
812-855-8679 (Fax)

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