Corporate Governance and Risk Taking : Evidence from European Insurance Markets

Item Type Journal paper
Abstract

We analyze the impact of factors related to corporate governance (i.e., compensation, monitoring, and ownership structure) on risk taking in the insurance industry. We measure asset, product, and financial risk in insurance companies and employ a structural equation model in which corporate governance is modeled as a latent factor. Based on this model, we present empirical evidence on the link between corporate governance and risk taking, considering insurers from two large European insurance markets. Higher levels of compensation, increased monitoring (more independent boards with more meetings), and more blockholders are associated with lower risk taking. Our empirical results provide justification for including factors related to corporate governance in insurance regulation.

Authors Eling, Martin & Marek, Sebastian
Journal or Publication Title Journal of Risk and Insurance
Language English
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date 1 September 2014
Publisher Wiley-Blackwell
Place of Publication Malden
Volume 2014
Number 81
Page Range 3-30
Number of Pages 28
ISSN 0022-4367
ISSN-Digital 1539-6975
Publisher DOI 10.1111/j.1539-6975.2012.01510.x
Depositing User Prof. Dr. Martin Eling
Date Deposited 05 Feb 2013 16:42
Last Modified 30 Oct 2018 17:42
URI: https://www.alexandria.unisg.ch/publications/220310

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Citation

Eling, Martin & Marek, Sebastian (2014) Corporate Governance and Risk Taking : Evidence from European Insurance Markets. Journal of Risk and Insurance, 2014 (81). 3-30. ISSN 0022-4367

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https://www.alexandria.unisg.ch/id/eprint/220310
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