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When Do International Operations Lead to Improved Performance? An Analysis of Property‐Liability Insurers

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  • Yu‐Luen Ma
  • B. Elango

Abstract

In recent decades, insurers have been increasing their exposure to international markets. This article seeks to investigate the relationship between property‐liability insurers' international operations and their risk‐adjusted returns using cross‐section and time‐series data for the years 1992 through 2000. Our findings indicate that the relationship between international operations and performance is contingent upon the degree of product diversification. Insurance companies with focused operations in terms of product lines achieve higher risk‐adjusted performance as they increase their exposures to international markets. However, insurers who are highly diversified across product lines face declining returns with greater exposure to international markets.

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  • Yu‐Luen Ma & B. Elango, 2008. "When Do International Operations Lead to Improved Performance? An Analysis of Property‐Liability Insurers," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 11(1), pages 141-155, March.
    • Handle: RePEc:bla:rmgtin:v:11:y:2008:i:1:p:141-155
    DOI: j.1540-6296.2008.00135.x
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    References listed on IDEAS

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    1. Biener, Christian & Eling, Martin & Jia, Ruo, 2017. "The structure of the global reinsurance market: An analysis of efficiency, scale, and scope," Journal of Banking & Finance, Elsevier, vol. 77(C), pages 213-229.
    2. Vincent Y. L. Chang, 2024. "Technology investments and firm performance under the wave of InsurTech," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 49(3), pages 501-536, July.
    3. Charles Andoh & Susana Adobea Yamoah, 2021. "Reinsurance and Financial Performance of Non-life Insurance Companies in Ghana," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 46(2), pages 161-174, May.
    4. Shiu, Yung-Ming, 2020. "How does reinsurance and derivatives usage affect financial performance? Evidence from the UK non-life insurance industry," Economic Modelling, Elsevier, vol. 88(C), pages 376-385.
    5. Muhammed Altuntas & Gerrit Gößmann, 2016. "The Relationship Between Home Market Performance and Internationalization Decisions: Evidence From German Insurance Groups," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 19(1), pages 37-71, March.

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