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An Investigation Into the Diversification–Performance Relationship in the U.S. Property–Liability Insurance Industry

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  • B. Elango
  • Yu‐Luen Ma
  • Nat Pope

Abstract

This article investigates the relationship between product diversification and firm performance in the U.S. property–liability insurance industry using data over the 1994 through 2002 time period. Using various measures of product diversification and firm performance, we find that the extent of product diversification shares a complex and nonlinear relationship with firm performance. Our findings suggest that performance benefits associated with product diversification are contingent upon an insurer's degree of geographic diversification. Robustness tests using subsamples and market returns for public firms show consistent results.

Suggested Citation

  • B. Elango & Yu‐Luen Ma & Nat Pope, 2008. "An Investigation Into the Diversification–Performance Relationship in the U.S. Property–Liability Insurance Industry," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 75(3), pages 567-591, September.
    • Handle: RePEc:bla:jrinsu:v:75:y:2008:i:3:p:567-591
    DOI: 10.1111/j.1539-6975.2008.00275.x
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    References listed on IDEAS

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