Organizational Structure, Board Composition, and Risk Taking in the U.S. Property Casualty Insurance Industry

35 Pages Posted: 26 Feb 2013

See all articles by Chia‐Ling Ho

Chia‐Ling Ho

affiliation not provided to SSRN

Gene C. Lai

affiliation not provided to SSRN

Jin‐Ping Lee

affiliation not provided to SSRN

Date Written: March 2013

Abstract

This study examines the impact of organizational structure and board composition on risk taking in the U.S. property casualty insurance industry, addressing different risk‐taking behaviors from different perspectives. The risk‐taking measures include total risk, underwriting risk, investment risk, and leverage risk. The evidence shows that mutual insurers have lower total risk, underwriting risk, and investment risk than stock insurers. In terms of board composition variables, we find that some board composition variables not only have impact on risk‐taking behaviors but also affect different risk measures differently. Thus, using different risk measures is better than using one risk measure to assess risk‐taking behavior. Finally, we conclude that an insurer can control its total risk through management of underwriting, investment, and leverage risks that determine an insurer's risk profile.

Suggested Citation

Ho, Chia‐Ling and Lai, Gene C. and Lee, Jin‐Ping, Organizational Structure, Board Composition, and Risk Taking in the U.S. Property Casualty Insurance Industry (March 2013). Journal of Risk and Insurance, Vol. 80, Issue 1, pp. 169-203, 2013, Available at SSRN: https://ssrn.com/abstract=2224491 or http://dx.doi.org/10.1111/j.1539-6975.2012.01464.x

Chia‐Ling Ho (Contact Author)

affiliation not provided to SSRN

No Address Available

Gene C. Lai

affiliation not provided to SSRN

Jin‐Ping Lee

affiliation not provided to SSRN

No Address Available

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
2
Abstract Views
709
PlumX Metrics