The Dynamic Interactions between Risk Management, Capital Management, and Financial Management in the U.S. Property/Liability Insurance Industry
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Patricia Born
This study examines empirically how risk management, financial management, and capital management are related to each other in the property/liability insurance industry, thereby reflecting interactions in managerial decisions such as the choice of derivatives and reinsurance use, the allocation of asset risks, the determination of underwriting activities and liability risks, and the adequacy of capital levels. This research contributes to the literature by adopting structural equation modeling to capture not only the dynamic interactions among capital management, financial management, and risk management, but also the effects of internal integrated factors or external regulatory factors on these managerial decisions. Among the empirical findings of this study, it is shown that risk management, capital management and financial management should be assessed under an integrated framework as emphasized in the concept of enterprise risk management. In addition, regulatory requirements embedded in the insurance industry might play an essential role in the integration of managerial decisions.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Articles in the same Issue
- Featured Article
- Comparison between Financial Theory and Cooperative Game Theory in Risk Capital Allocation
- The Dynamic Interactions between Risk Management, Capital Management, and Financial Management in the U.S. Property/Liability Insurance Industry
- The Effects of Economies of Scale and Diversification on the Cost Structure of the Malaysian Non-life Insurance Industry
- Effects of Disability-Based Underwriting Prohibitions on the Labor Market
- The Cost of Delay in a Mortgage/Credit Loan Portfolio
- Commentary Piece
- Some Comments on Catastrophe Risk Management and Insurance
Articles in the same Issue
- Featured Article
- Comparison between Financial Theory and Cooperative Game Theory in Risk Capital Allocation
- The Dynamic Interactions between Risk Management, Capital Management, and Financial Management in the U.S. Property/Liability Insurance Industry
- The Effects of Economies of Scale and Diversification on the Cost Structure of the Malaysian Non-life Insurance Industry
- Effects of Disability-Based Underwriting Prohibitions on the Labor Market
- The Cost of Delay in a Mortgage/Credit Loan Portfolio
- Commentary Piece
- Some Comments on Catastrophe Risk Management and Insurance
