The impact of EIOPA statement on insurers dividends: evidence from equity market

Petr Jakubík

No 18, EIOPA Financial Stability Report - Thematic Articles from EIOPA, Risks and Financial Stability Department

Abstract: In an environment of a quick unfolding crisis with high uncertainty, the European Insurance and Occupational Pensions Authority issued on 2nd April 2020 a statement requesting (re)insurers to suspend all discretionary dividend distributions and share buy backs aimed at remunerating shareholders. Although, this should have a positive impact on the overall financial stability of the sector, it could have a negative impact on insurers’ equity prices as a response to the published statement. Hence, this article empirically investigates this potential effect using an event study methodology. Although, negative drops were observed in some cases, the obtained empirical results suggest that they were not statistically significant for the overall European insurers’ equity market when considering the event windows covering a few days after the publication.

Keywords: insurance; dividends; equity market; event study (search for similar items in EconPapers)
JEL-codes: G11 G12 G22 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2020-07
New Economics Papers: this item is included in nep-ias
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Published in Financial Stability Report, EIOPA, July 2020, pages 104-120

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Persistent link: https://EconPapers.repec.org/RePEc:eio:thafsr:18

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