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The impact of EIOPA statement on insurers dividends: evidence from equity market

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  • Petr Jakubik

    (EIOPA)

Abstract

In an environment of a quick unfolding crisis with high uncertainty, the European Insurance and Occupational Pensions Authority issued on 2nd April 2020 a statement requesting (re)insurers to suspend all discretionary dividend distributions and share buy backs aimed at remunerating shareholders. Although, this should have a positive impact on the overall financial stability of the sector, it could have a negative impact on insurers’ equity prices as a response to the published statement. Hence, this article empirically investigates this potential effect using an event study methodology. Although, negative drops were observed in some cases, the obtained empirical results suggest that they were not statistically significant for the overall European insurers’ equity market when considering the event windows covering a few days after the publication.

Suggested Citation

  • Petr Jakubik, 2020. "The impact of EIOPA statement on insurers dividends: evidence from equity market," EIOPA Financial Stability Report - Thematic Articles 18, EIOPA, Risks and Financial Stability Department.
  • Handle: RePEc:eio:thafsr:18
    as

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    File URL: https://www.eiopa.europa.eu/sites/default/files/financial_stability/20203310_thematic-article-impact-of-eiopa-statement-on-insurers-dividends.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    insurance; dividends; equity market; event study;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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