Curbing systemic risk in the insurance sector: A mission impossible?

Paola Bongini, Laura Nieri, Matteo Pelagatti and Andrea Piccini

The British Accounting Review, 2017, vol. 49, issue 2, 256-273

Abstract: This paper addresses the issue of systemic risk in insurance and investigates how financial markets evaluate the introduction of a new regulation addressed to global systemically important insurers (G-SIIs). We analysed the stock price reactions and the evolution of the distance-to-default of a sample of 44 of the world's largest insurers to the publication of the first list of 9 G-SIIs and the release of information regarding their new capital requirements and other policy measures. The results of our event study suggest that, overall, investors doubt the effectiveness of the new regulatory framework in reducing systemic risk in the insurance sector and curbing the moral hazard implications of a “too systemic to fail” policy.

Keywords: Systemic risk; Insurance companies; Event study; Regulatory reforms; Loss absorbency requirements (search for similar items in EconPapers)
JEL-codes: G01 G14 G22 G28 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:49:y:2017:i:2:p:256-273

DOI: 10.1016/j.bar.2016.08.002

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