<scp>The Value of Contingent Commissions in the Property–Casualty Insurance Industry: Evidence From Stock Market Returns</scp>

Ghosh, Chinmoy; Hilliard, James I.

doi:10.1111/j.1539-6975.2010.01399.x

Cited by 12 publications

(11 citation statements)

References 49 publications

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“…Size appears to be an important explanatory variable whether measured by total assets, sales (Firth, 1979), or market value (Hossain, Tan, & Adams, 1994;Lang & Lundholm, 1993). At the one end of the continuum, Ahmed & Nicholls (1994) argue that larger firms are more likely to have the resources and expertise necessary for the coalition, production and publication of more informative annual reports; similarly, Firth (1979) relates larger firms with the ability to meet the collecting and dissemination costs related to such activities. At the other end of the continuum, smaller firms may restrict full www.ccsenet.org/ass Asian Social Science Vol.…”

Section: Hypotheses and Research Designmentioning

confidence: 99%

Firm Resources, Corporate Governance and the Disclosure of Intangible Assets

Mkumbuzi¹

2015

ASS

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The paper investigates the determinants of intangible asset disclosure with reference to the interaction of heterogeneous asset and governance characteristics of firms. Specifically, it considers R&D intensity as a measure of asset heterogeneity and multiple proxies for the effectiveness of the firm's corporate governance mechanisms and structures of accountability. Intellectual capital attributes are applied as the measure of disclosure quality and as the signalling mechanism through which management are able to inform markets of their competitive advantage. By applying the resource based view of the firm and signalling theory, the paper extends prior research on the determinants of intangibles disclosure through an analytical framework that examines the interaction of firm resources, corporate governance and intangibles disclosure. The theoretical framework combines the RBV of the firm in confirming intangibles as a necessary feature of disclosing firms' asset base and signalling as the means with which management disclose their competitive advantage. The results of the analysis indicate a positive relationship between R&D intensity, complexity and scope of activity and the presence of quality signalling responses. Also, the separation of the roles of chair and non-executive director, complemented by experienced non-executive directors promote quality signalling through the disclosure of intellectual capital attributes. These findings support the view that corporate governance mechanisms are only effective when applied in combination. Governance mechanisms bring about transparency and accountability through disclosure of these intangibles despite the potential competitive losses. The lack of proprietary costs that might otherwise restrict disclosure might be attributed to competitors' inability to imitate such intellectual capital resources and therefore their inability to duplicate such signals. The findings confirm the interaction between heterogeneous assets and governance mechanisms in the disclosure of intangibles as signalling mechanisms for management.

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Section: Hypotheses and Research Designmentioning

confidence: 99%

Firm Resources, Corporate Governance and the Disclosure of Intangible Assets

Mkumbuzi¹

2015

ASS

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“…They suggest that the payments of profit‐based contingents are used to dampen the negative effects of the underwriting cycle for those insurers. Both Ghosh and Hilliard () and Cheng et al. () examine the effect of the 2004 Spitzer Investigation on the stock market value of insurers and find a significant negative effect.…”

Section: Background and Literature Reviewmentioning

confidence: 99%

Contingent Commissions, Insurance Intermediaries, and Insurer Performance

Ma¹,

Pope²,

Xie³

2013

Risk Manage Insurance Review

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This research investigates the relationship shared by contingent commission usage and insurer performance. We assess performance using both frontier efficiency and financial performance measures. Our findings reveal that the relationship is complex and varies across differing insurer business models. We find that nonusers of contingent commissions are more cost and revenue efficient than are users of contingents. However, among insurers that use contingents, relatively higher levels of use are associated with more efficient operations and also better financial performance. Additionally, these findings are conditioned on the type of distribution system the insurer employs.

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“…2 2 The two recent event studies Cheng et al (2010) and Gosh and Hillard (2012) give further support for the incentive argument. In 2004, the New York Attorney General Eliot Spitzer announced a lawsuit against an insurance broker and other involved insurance companies.…”

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confidence: 91%

Intermediation and (Mis‐)Matching in Insurance Markets—Who Should Pay the Insurance Broker?

Focht

Richter

Schiller

2012

J of Risk & Insurance

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This article addresses the role of independent insurance intermediaries in markets where matching is important. We compare fee‐based and commission‐based compensation systems and show that they are payoff equivalent if the intermediary is completely honest. Allowing for strategic behavior, we discuss the impact of remuneration on the quality of advice. The possibility of mismatching gives the intermediary substantial market power, which will not translate into mismatching if consumers are rational. Furthermore, we offer a rationale for the use of contingent commissions and address whether or not the ban of any commission payments is an appropriate market intervention.

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The Value of Contingent Commissions in the Property–Casualty Insurance Industry: Evidence From Stock Market Returns

Cited by 12 publications

References 49 publications

Firm Resources, Corporate Governance and the Disclosure of Intangible Assets

Firm Resources, Corporate Governance and the Disclosure of Intangible Assets

Contingent Commissions, Insurance Intermediaries, and Insurer Performance

Intermediation and (Mis‐)Matching in Insurance Markets—Who Should Pay the Insurance Broker?

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