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The Effect of the Great East Japan Earthquake on the Stock Prices of Non-life Insurance Companies

Author

Listed:
  • Atsushi Takao

    (Graduate School of Business Administration, Kobe University, 2-1 Rokkodai-cho, Nada-ku, Kobe, Hyogo 657-8501, Japan. E-mails: takao@kobe-u.ac.jp; yamasaki@kobe-u.ac.jp)

  • Takuya Yoshizawa

    (H.S. Insurance Co. Ltd., 3-12, Yotsuya, Shinjuku-ku, Tokyo 160-0004, Japan.)

  • Shuofen Hsu

    (Department of Risk Management and Insurance, National Kaohsiung First University of Science and Technology, No. 2, Juoyue Rd., Nantz District, Kaohsiung 811, Taiwan.)

  • Takashi Yamasaki

    (Graduate School of Business Administration, Kobe University, 2-1 Rokkodai-cho, Nada-ku, Kobe, Hyogo 657-8501, Japan. E-mails: takao@kobe-u.ac.jp; yamasaki@kobe-u.ac.jp)

Abstract

The Great East Japan Earthquake of 11 March 2011 incurred huge damages for Japan. This paper investigates how this earthquake influenced the value of Japanese insurance companies, especially non-life insurance companies. Our findings are as follows. (1) The stock prices of insurance companies decreased right after the earthquake. The spread of this decrease was less for the stock prices of non-life insurance companies than for those of life insurance companies. (2) The more capital buffer a non-life insurance company had, the higher the stock return. (3) The Earthquake Insurance System on Dwelling Risks in Japan not only indemnifies seismic losses but also functions as a Japanese stock market stabiliser.

Suggested Citation

  • Atsushi Takao & Takuya Yoshizawa & Shuofen Hsu & Takashi Yamasaki, 2013. "The Effect of the Great East Japan Earthquake on the Stock Prices of Non-life Insurance Companies," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 38(3), pages 449-468, July.
    • Handle: RePEc:pal:gpprii:v:38:y:2013:i:3:p:449-468
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    Citations

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    Cited by:

    1. Valizadeh, Pourya & Karali, Berna & Ferreira, Susana, 2017. "Ripple effects of the 2011 Japan earthquake on international stock markets," Research in International Business and Finance, Elsevier, vol. 41(C), pages 556-576.
    2. Montero, José-María & Naimy, Viviane & Farraj, Nermeen Abi & El Khoury, Rim, 2024. "Natural disasters, stock price volatility in the property-liability insurance market and sustainability: An unexplored link," Socio-Economic Planning Sciences, Elsevier, vol. 91(C).
    3. Vijay Aseervatham & Patricia Born & Dominik Lohmaier & Andreas Richter, 2017. "Hazard-Specific Supply Reactions in the Aftermath of Natural Disasters," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(2), pages 193-225, April.
    4. Daniel Castillo & Joseph Falzon, 2018. "An Analysis of the Impact of WannaCry Cyberattack on Cybersecurity Stock Returns," Review of Economics & Finance, Better Advances Press, Canada, vol. 13, pages 93-100, August.
    5. Pandey, Dharen Kumar & Kumar, Satish & Kumari, Vineeta & Alahdal, Waleed M., 2024. "Quaking the stock market: Event study evidence on the Turkey-Syria earthquake," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 182-194.
    6. Nobuyoshi Yamori & Yoshihiro Asai, 2017. "Great East Japan Earthquake and Risk Management for Small and Medium-Sized Enterprises ―How Do Japanese SMEs Prepare against Natural Disasters?－," Discussion Paper Series DP2017-14, Research Institute for Economics & Business Administration, Kobe University.

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