IDEAS home Printed from https://ideas.repec.org/a/ids/injbaf/v4y2012i1p48-76.html
   My bibliography  Save this article

Internal and external drivers for risk taking in UK and German insurance markets

Author

Listed:
  • Martin Eling
  • Sebastian D. Marek

Abstract

The aim of this paper is to analyse the impact of both firm-specific and external factors on the risk taking of European insurance companies. The extent of risk taking is quantified through variations in stock prices and these are explained by firm-specific and external factors that proxy the environment in which the insurers are active. Using a two-way panel regression analysis with fixed and random effects, our empirical study covers hand-collected data on 35 German and UK insurance companies for the period 1997 to 2010. We find that differences in company size, capital structure, liquidity, and economic development affect variations in stock prices. The analysis also highlights differences between the market-based UK corporate governance system and the control-based regime implemented in Germany, with the UK exhibiting a higher level of risk, compensation, and board independence. We also document increases in the volatility of insurance stock returns during the financial crisis.

Suggested Citation

  • Martin Eling & Sebastian D. Marek, 2012. "Internal and external drivers for risk taking in UK and German insurance markets," International Journal of Banking, Accounting and Finance, Inderscience Enterprises Ltd, vol. 4(1), pages 48-76.
    • Handle: RePEc:ids:injbaf:v:4:y:2012:i:1:p:48-76
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=45513
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dong, Ming, 2014. "The impact of firm-level transparency on the ex ante risk decisions of insurers: Evidence from an empirical study," ICIR Working Paper Series 14/14, Goethe University Frankfurt, International Center for Insurance Regulation (ICIR).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:injbaf:v:4:y:2012:i:1:p:48-76. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=277 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.