The impact of Sarbanes–Oxley on property-casualty insurer loss reserve estimates

Yu-Luen Ma () and Nat Pope ()
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Yu-Luen Ma: University of North Texas
Nat Pope: University of North Texas

The Geneva Papers on Risk and Insurance - Issues and Practice, 2020, vol. 45, issue 2, No 4, 313-334

Abstract: Abstract The implementation of the Sarbanes–Oxley (SOX) Act in 2002 imposed a wide range of new oversight standards seeking to assure greater accuracy and transparency in the financial reporting of publicly traded firms in the U.S. This research assesses the relationship that the implementation of SOX shares with loss reserve estimation accuracy in the U.S. property-casualty insurance market. Using a comparative difference-in-difference approach, this research finds that, while publicly traded insurers have indeed experienced a significant reduction in loss reserve errors subsequent to SOX, the reduction is not attributable to SOX. These results hold true under a handful of robustness analyses.

Keywords: Sarbanes–Oxley Act; Loss reserve estimation; Property-casualty insurance (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1057/s41288-019-00139-5

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