Unraveling the Dynamics of Corporate Dividend Policy: Evidence from the Property-Liability Insurance Industry

Yiling Deng (), Michael Casey, Haibo Yao and Ning Wang
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Yiling Deng: Department of Economics, Finance, Insurance and Risk Management, College of Business, University of Central Arkansas, Conway, AR 72035, USA
Michael Casey: Department of Economics, Finance, Insurance and Risk Management, College of Business, University of Central Arkansas, Conway, AR 72035, USA
Haibo Yao: Department of Economics, Finance, Insurance and Risk Management, College of Business, University of Central Arkansas, Conway, AR 72035, USA
Ning Wang: Mike Cottrell College of Business, University of North Georgia, Dahlonega, GA 30597, USA

JRFM, 2025, vol. 18, issue 5, 1-14

Abstract: What drives corporate dividend policy remains an unsettled issue, largely due to data limitations, as many privately held firms do not need to disclose their financial reports publicly. We examine and compare the dividend policies of firms with three distinct ownership structures—publicly held stock insurers, privately held stock insurers, and mutual insurers—within the U.S. property-liability insurance industry. Our findings indicate that publicly held insurers are more likely to distribute dividends and tend to pay higher dividends compared to privately held insurers, with mutual insurers paying the least in the matched sample. We found that mutual insurers’ dividend policies are more sensitive to cash flow, whereas stock insurers’ policies are more responsive to profits. We show that private insurers have significantly less smoothness in dividend policies. Our findings highlight the significant role that ownership structure plays in shaping corporate dividend policies.

Keywords: dividend policies; dividend smoothing; property-liability insurance (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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