What Motivates Insurers to Use Derivatives: Evidence from the United Kingdom Life Insurance Industry
Using firm-specific variables that proxy for the motivations of life insurers’ decision to participate in derivative transactions, we examine existing theories of corporate hedging behaviour. Our findings support the evidence of previous research that risk management and scale factors explain the use of derivatives. We observe a substitution effect that insurers use on-balance-sheet hedging through structuring their assets and liabilities to reduce price risks.
Year of publication: |
2011
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Authors: | Shiu, Yung-Ming |
Published in: |
The Geneva Papers on Risk and Insurance - Issues and Practice. - Palgrave Macmillan, ISSN 1018-5895. - Vol. 36.2011, 2, p. 186-196
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Publisher: |
Palgrave Macmillan |
Saved in:
Online Resource
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