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Insurance Markets Risk Affects Global Reinsurance Market Risk? Evidence from USA and Europe Insurance Markets

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  • Apostolos Kiohos

Abstract

Reinsurance is the last shelter of traditional international risk management. Insurance companies cede part of their risks incurred to the reinsurance companies and this enhances the proper risk diversification procedure. This paper investigates the risk transmission characteristics from the USA and Europe insurance markets on the Global reinsurance market in order to analyse the risk affection of insurance to the reinsurance sector. The results suggest that there is a relatively low risk influence of non-life and life insurance companies on the global reinsurance index. Also, last four years the U.S. non-life and life insurance markets volatility asymmetry has an impact on the volatility of the global reinsurance index in terms of bad and good news. The volatility persistence is high before and after the pandemic period, indicating that if there is an extreme volatility shock in the insurance markets, the impact will occur faster on global reinsurance, except for the European non-life insurance index, which has the lowest impact on the reinsurance market in terms of the volatility persistence.

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  • Apostolos Kiohos, 2024. "Insurance Markets Risk Affects Global Reinsurance Market Risk? Evidence from USA and Europe Insurance Markets," Bulletin of Applied Economics, Risk Market Journals, vol. 11(2), pages 55-64.
    • Handle: RePEc:rmk:rmkbae:v:11:y:2024:i:2:p:55-64
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    8. Apostolos Kiohos, 2020. "Risk Affection and Transmission of News of Conditional Volatility from the Non-Life to Life Insurance Sector," Bulletin of Applied Economics, Risk Market Journals, vol. 7(2), pages 77-86.
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    Keywords

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    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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