The Impact of the September 11 Terrorist Attack on the Global Insurance Markets: Evidence from the Japanese Property-Casualty Insurance Industry

Journal of Insurance Issues 33 (1): 85-107

Posted: 30 Dec 2009 Last revised: 14 Feb 2015

See all articles by Noriyoshi Yanase

Noriyoshi Yanase

Keio University - Faculty of Business and Commerce

Yukihiro Yasuda

Hitotsubashi University

Date Written: July 6, 2010

Abstract

We investigate the significant effects of the September 11 attacks on the Japanese stock market, one of the largest markets in the world. Although several studies have examined the impact of the attacks on the domestic U.S. stock market, few studies have analyzed their impact on the foreign insurance industry through globally well-developed reinsurance transactions. Interestingly, a mid-sized P/C insurance company, TAISEI Fire and Marine Insurance, went bankrupt on November 22, 2001, two months after the events, due to massive reinsurance claims arising from the terrorist attacks. Using traditional event study methodology for both events, the attacks and the failure, we find that the Japanese stock market reacted to risks of the terrorism event through the global reinsurance market at the time of TAISEI’s failure, rather than immediately after the events of September 11.

Keywords: Japanese Insurance Market, Reinsurance, Terrorist’s attacks

JEL Classification: G23

Suggested Citation

Yanase, Noriyoshi and Yasuda, Yukihiro, The Impact of the September 11 Terrorist Attack on the Global Insurance Markets: Evidence from the Japanese Property-Casualty Insurance Industry (July 6, 2010). Journal of Insurance Issues 33 (1): 85-107, Available at SSRN: https://ssrn.com/abstract=1529566

Noriyoshi Yanase (Contact Author)

Keio University - Faculty of Business and Commerce ( email )

2-15-45 Mita
Minato-ku
Tokyo 108-8345
Japan
1088345 (Fax)

Yukihiro Yasuda

Hitotsubashi University ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8601
Japan

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