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U.S. life insurers’ responses to the financial crisis: a review of the research

Author

Listed:
  • Niehaus, Greg

    (Darla Moore School of Business, University of South Carolina)

  • Chiang, Chia-Chun

    (Darla Moore School of Business, University of South Carolina)

Abstract

Understanding how institutions were impacted by the financial crisis and how they responded is important for developing risk management plans that are capable of dealing with potential future crises. This paper therefore examines the impact of the financial crisis on U.S. life insurers and reviews the research on how life insurers responded to the crisis. Most life insurers were not significantly affected by the crisis, but some suffered large operating and investment losses. Regarding responses, the paper distinguishes activities that increased economic capital as well as statutory capital (e.g., cutting dividends and obtaining capital infusions) from activities that increased statutory capital without having a direct positive impact on economic capital (e.g., selling policies at a discount relative to fair value and selling securities at fire sale prices).

Suggested Citation

  • Niehaus, Greg & Chiang, Chia-Chun, 2017. "U.S. life insurers’ responses to the financial crisis: a review of the research," Journal of Financial Perspectives, EY Global FS Institute, vol. 4(1), pages 107-120.
    • Handle: RePEc:ris:jofipe:0104
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    Cited by:

    1. Kirti, Divya, 2024. "When gambling for resurrection is too risky," Journal of Banking & Finance, Elsevier, vol. 162(C).

    More about this item

    Keywords

    Financial Crisis; Insurance; Capital Requirements;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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