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The Rising Interconnectedness of the Insurance Sector

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  • Tristan Jourde

Abstract

This paper examines the long-term evolution of the linkages of the insurance sector with financial and non-financial companies. We develop a measure of connectedness using a multifactor model of weekly equity returns. The empirical analysis is conducted from 1973 to 2018, for 16 developed countries, at both the sectoral and institution levels. The results indicate that, unlike other sectors, the connectedness level of the insurance industry has strengthened over time. We also find that the linkages of the largest insurance companies with financial and non-financial firms are structurally different but as high as those of the largest banks.

Suggested Citation

  • Tristan Jourde, 2022. "The Rising Interconnectedness of the Insurance Sector," Working papers 857, Banque de France.
    • Handle: RePEc:bfr:banfra:857
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    2. Zulu, Thulani & Manguzvane, Mathias Mandla & Bonga-Bonga, Lumengo, 2023. "Assessing the contribution of South African Insurance Firms to Systemic Risk," MPRA Paper 116815, University Library of Munich, Germany.
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    More about this item

    Keywords

    Comovements; Insurance Sector; Interconnectedness; Macroprudential Regulation; Systemic Risk;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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