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The Efficacy Of Regulators' Estimates Of Life Insurer Portfolio Risk

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  • L. Lee Colquitt
  • Larry A. Cox

Abstract

In recent years, state regulators have expended considerable effort and resources to better measure the asset portfolio risk of life insurers. Their estimates are both particularly important in determining reserve requirements and potentially useful for testing the agency costs of conflict between the fixed and residual claimants of insurers. In this study, we test the degree to which these regulator‐developed measures are related to the firm and environmental characteristics that financial economists have linked to managerial risk‐taking propensities. Our results provide insight into whether these measures effectively gauge the risk preferences of insurer managers.

Suggested Citation

  • L. Lee Colquitt & Larry A. Cox, 1999. "The Efficacy Of Regulators' Estimates Of Life Insurer Portfolio Risk," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 2(2), pages 1-13, January.
    • Handle: RePEc:bla:rmgtin:v:2:y:1999:i:2:p:1-13
    DOI: j.1540-6296.1999.tb00048.x
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    References listed on IDEAS

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    Cited by:

    1. Che, Xin & Liebenberg, Andre P., 2017. "Effects of business diversification on asset risk-taking: Evidence from the U.S. property-liability insurance industry," Journal of Banking & Finance, Elsevier, vol. 77(C), pages 122-136.

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