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
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: Suggested Citation