The financial impact of the implementation of Solvency II on the Mexican insurance sector

Nora Gavira-Durón (), Daniel Mayorga-Serna () and Alberto Bagatella-Osorio ()
Additional contact information
Nora Gavira-Durón: Universidad de las Americas Puebla (UDLAP)
Daniel Mayorga-Serna: Universidad de las Americas Puebla (UDLAP)
Alberto Bagatella-Osorio: Universidad de las Americas Puebla (UDLAP)

The Geneva Papers on Risk and Insurance - Issues and Practice, 2022, vol. 47, issue 2, No 5, 349-374

Abstract: Abstract This paper examines the effects of the regulatory changes implemented in the Mexican insurance sector in adjustment to the international regulations of Solvency II imposed by the International Association of Insurance Supervisors. The effect of regulatory changes on the risk and performance levels of foreign entities was analysed and compared with their domestic counterparts. Using a difference-in-difference estimator, significant evidence that foreign insurance companies enhanced their default risk after complying with the law was found. The findings showed that the stability levels of domestic entities were negatively affected. No effect on the performance level for both types of entities was found. This study provides evidence that foreign entities were already prepared for the change in regulation, as opposed to domestic ones, due to their association with their foreign holdings.

Keywords: Insurance companies; Government policy and regulation; Financing policy (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1057/s41288-020-00196-1 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:gpprii:v:47:y:2022:i:2:d:10.1057_s41288-020-00196-1

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/41288/PS2

DOI: 10.1057/s41288-020-00196-1

Access Statistics for this article

The Geneva Papers on Risk and Insurance - Issues and Practice is currently edited by Christophe Courbage

More articles in The Geneva Papers on Risk and Insurance - Issues and Practice from Palgrave Macmillan, The Geneva Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().