Login | Register

The Impact of Natural Catastrophes on Property/Liability Insurers: A Geographical Proximity Analysis

Title:

The Impact of Natural Catastrophes on Property/Liability Insurers: A Geographical Proximity Analysis

Sun, Xiao (2015) The Impact of Natural Catastrophes on Property/Liability Insurers: A Geographical Proximity Analysis. Masters thesis, Concordia University.

[img]
Preview
Text (application/pdf)
Sun_MSc_F2015.pdf - Accepted Version
2MB

Abstract

We investigate the impact of hurricanes, as an anticipated natural disaster, on the premium incomes and stock prices of property and casualty insurers in the United States. Our sample consists of forty-seven publicly traded insurance firms in the U.S. and the three most serious hurricanes during the period from 2006 to 2014. The three hurricanes are broken down into 150 state-level hazards, including twenty-seven states that were directly affected by the disasters, twenty-seven states that were close-by, and ninety-six states that were unaffected. Our results show that insurers in all areas have a significant premium increase after hurricanes. Premium changes are significantly different between any two types of areas in an event year. In addition, we observe that the expected benefits from potential premium increases after a catastrophe appear to dominate the costs insurance companies incur as a result of policyholders’ reimbursement claims. However, while there are no obvious distinguishing results among areas, there is some discrimination. These results vary based on a state’s geographical proximity to a disaster. Insurers in close-by states enjoy some advantages from hurricanes. In contrast, insurers in affected states suffer negative consequences. Finally, we observe that the severity of hurricanes causes significant differences in abnormal performance. Big companies suffer negative impacts due to hurricanes. Higher returns on assets are associated with higher abnormal returns.

Divisions:Concordia University > John Molson School of Business > Finance
Item Type:Thesis (Masters)
Authors:Sun, Xiao
Institution:Concordia University
Degree Name:M. Sc.
Program:Administration (Finance option)
Date:August 2015
Thesis Supervisor(s):Walker, Thomas J.
ID Code:980406
Deposited By: XIAO SUN
Deposited On:04 Nov 2015 20:12
Last Modified:18 Jan 2018 17:51
All items in Spectrum are protected by copyright, with all rights reserved. The use of items is governed by Spectrum's terms of access.

Repository Staff Only: item control page

Downloads per month over past year

Back to top Back to top