Catastrophic Shocks in the Property-Liability Insurance Industry: Evidence on Regulatory and Contagion Effects

Angbazo, Lazarus A.; Narayanan, R.

doi:10.2307/253474

Cited by 85 publications

(54 citation statements)

References 13 publications

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“…Shelor et al (1992) and Aiuppa et al (1993), for example, both concluded that insurer stock values increased after California's Loma Prieta earthquake (insured loss US$2.5 billion) in part because high earthquake insurance rates and low perceived risk meant many property owners were uncovered at the time. Conversely, Lamb (1995) and Angbazo and Narayanan (1996) found that the large negative effect of Florida and Louisiana's Hurricane Andrew (insured loss US$16.5 billion) was only slightly offset by the subsequent premium increases, and furthermore that the event even showed evidence of a contagion effect to insurers with no claims exposure in the hurricane affected states. Lastly, Cagle (1996) concluded that South Carolina's Hurricane Hugo (insured loss US$4.2 billion) caused a significant negative price reaction for insurers with high exposure and unaffected those with low exposure.…”

Section: Introductionmentioning

confidence: 99%

Measuring the impact of natural disasters on capital markets: an empirical application using intervention analysis

Worthington¹,

Valadkhani

2004

Applied Economics

138

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Section: Introductionmentioning

confidence: 99%

Measuring the impact of natural disasters on capital markets: an empirical application using intervention analysis

Worthington¹,

Valadkhani

2004

Applied Economics

138

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“…4 Examples of previous treatments of the insurance of catastrophic risks include special issues of the Journal of Risk and Insurance (December 1996) and the Geneva Papers on Risk and Insurance (April 1997). Representative articles are those by Grace, Klein and Kleindorfer (2004), Angbazo and Narayanan (1996), Gollier (1997), Kleffner This paper will provide a detailed empirical examination of how catastrophic risks affect the performance of the market for homeowners' insurance. The dataset that we use is unprecedented in the homeowners' insurance literature in terms of its level of detail.…”

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confidence: 99%

The catastrophic effects of natural disasters on insurance markets

Viscusi

Born

2006

J Risk Uncertainty

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Natural disasters often have catastrophic risks on insurance companies as well as on the insured. Using a very large dataset on homeowners' insurance coverage by state, by firm, and by year for the 1984 to 2004 period, this paper documents the positive effect on losses and loss ratios of both unexpected catastrophes as well as large events that the authors term "blockbuster catastrophes." Insurers adapt to these catastrophic risks by raising insurance rates, leading to lower loss ratios after the catastrophic event. There is a widespread event of unexpected catastrophes and blockbuster catastrophes that reduces total premiums earned in the state, reduces the total number writing insurance coverage in the state, and leads to the exit of firms from the state. Firms with low levels of homeowners' premiums are most adversely affected by the catastrophes.

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“…Jahankhani and Lynge (1980), Brewer and Lee (1986), Karels et al (1989) and Jacques and Nigro (1997) argued that equity to total assets ratio is negatively related to risk. Ho and Saunders (1981), Allen (1988), Angbazo and Narayanan (1996) and Saunders and Schumacher (2000) analysed the effect of bank risk on the net interest margin as a measure of bank profitability.…”

Section: Bank Capital and Riskmentioning

confidence: 99%

Bank capital, profitability and risk in BRICS banking industry

Jabra

Mighri

Mansouri

2017

GBER

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This paper analyses the relationship between bank capital, risk and profitability for the BRICS banking industry data from 2004 to 2012. We use a dynamic panel data model based on two-step GMM estimation procedure. For the sake of analysis, we differentiate between before and after crisis periods in order to highlight the impact of financial crisis on clearing up the above relationship. The main empirical results are summarised as follows: 1) capital and risk are significantly and negatively related, while capital and profitability are significantly and positively linked; 2) bank capital has the greatest positive impact on ROE measure of profitability for investment banks; 3) BRICS investment banks are likely associated with a more sound financial supervision and technology; 4) regulatory quality and institutional developments are dependent upon differences in profitability and risk; 5) Results also provide evidence that financial crisis affects considerably the relationship between capital, risk and profitability. 90W. Ben Jabra et al.

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Catastrophic Shocks in the Property-Liability Insurance Industry: Evidence on Regulatory and Contagion Effects

Cited by 85 publications

References 13 publications

Measuring the impact of natural disasters on capital markets: an empirical application using intervention analysis

Measuring the impact of natural disasters on capital markets: an empirical application using intervention analysis

The catastrophic effects of natural disasters on insurance markets

Bank capital, profitability and risk in BRICS banking industry

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