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Intangible Assets and Firm Asset Risk Taking: An Analysis of Property and Liability Insurance Firms

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  • Tong Yu
  • Bingxuan Lin
  • Henry R. Oppenheimer
  • Xuanjuan Chen

Abstract

Intangible assets facilitate insurers' capacity to retain existing business and attract new clients. In this study we analyze how the incentives to protect intangible assets affect asset risk‐taking behavior of property and liability insurers. The result supports the view that insurers' incentives to protect their intangible assets lead to an inverse relation between intangible assets and asset risk. Consistent with the view that highly levered firms may go for broke, asset risk of highly levered insurers is less elastic to intangible assets than that of lower‐levered insurers. An additional notable finding of our article is that tangible factors like firm size and capitalization increase insurers' appetites for asset risk taking.

Suggested Citation

  • Tong Yu & Bingxuan Lin & Henry R. Oppenheimer & Xuanjuan Chen, 2008. "Intangible Assets and Firm Asset Risk Taking: An Analysis of Property and Liability Insurance Firms," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 11(1), pages 157-178, March.
    • Handle: RePEc:bla:rmgtin:v:11:y:2008:i:1:p:157-178
    DOI: j.1540-6296.2008.00136.x
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    References listed on IDEAS

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    1. Sunghan Bae & Andre P. Liebenberg & Ivonne A. Liebenberg, 2023. "Equity Investment Decisions of Operating Firms: Evidence from Property and Liability Insurers," JRFM, MDPI, vol. 16(4), pages 1-24, April.

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