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Gender Differences in Reserving Conservatism

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  • Xin Che
  • Jianren Xu

Abstract

Given the rapidly growing industry-wide trends to promote diversity, we provide the first evidence that executive gender differences impact insurer corporate decisions by examining reserve management. In a sample of property-liability insurers with 34 unique female chief executive officers (CEOs) from 2007 to 2013, we find that female CEOs are associated with more conservative loss reserves. Economically, female CEOs over-reserve by 2.25% of total assets, relative to male CEOs. Our identification strategy relies on an instrumental variable approach and a difference-in-differences design based on a propensity-score matched sample. In an analysis of a subset of 13 unique female CEOs involved in turnovers, we find that reserving conservatism increases (decreases) following male-to-female (female-to-male) CEO turnovers compared with male-to-male turnovers. Our study provides economic implications for the industry-wide initiatives and is relevant to various stakeholders.

Suggested Citation

  • Xin Che & Jianren Xu, 2024. "Gender Differences in Reserving Conservatism," North American Actuarial Journal, Taylor & Francis Journals, vol. 28(3), pages 658-677, July.
    • Handle: RePEc:taf:uaajxx:v:28:y:2024:i:3:p:658-677
    DOI: 10.1080/10920277.2023.2259433
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