Local religious beliefs and insurance companies’ risk-taking behaviour

Thomas R. Berry-Stölzle () and Jianren Xu ()
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Thomas R. Berry-Stölzle: University of Iowa
Jianren Xu: University of North Texas

The Geneva Papers on Risk and Insurance - Issues and Practice, 2022, vol. 47, issue 2, No 2, 242-278

Abstract: Abstract We empirically examine the effect of local religious beliefs on the risk-taking behaviour of U.S. life insurers headquartered in that region. We distinguish between insurers that predominantly write annuities and insurers that predominantly write life insurance policies; the annuity business is relatively riskier than writing life insurance. Insurers headquartered in high-Catholic or low-Protestant areas are more likely to be annuity writers. Annuity writers located in high-Catholic or low-Protestant areas invest more in risky assets and exhibit higher investment return volatilities, as well as a higher volatility of their return on assets. Overall, our results suggest that local culture has significant influences on life insurers’ behaviour.

Keywords: Risk-taking; Local religious beliefs; Insurance companies (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1057/s41288-021-00211-z

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