Empirical evidence suggests that insurance groups allocate capital to members with better performance or growth prospects and use internal capital markets to protect franchise value of less capitalized members. We propose and test an additional motivation for the use of internal capital markets...

Investors may under-diversify their portfolios by overweighting securities in which they perceive an informational advantage or by underweighting securities to hedge risks outside the portfolio. We investigate under-diversification in institutional portfolio construction by examining the...

We investigate the effect of line-of-business diversification on asset risk-taking in the U.S. property-liability industry. The coordinated risk management hypothesis (Schrand and Unal, 1998) implies a negative relation between underwriting risk and investment risk. Consistent with this...

Previous research has examined the demand for life insurance policy loans using aggregate policy loan data. In contrast, we use a detailed household survey dataset containing life insurance and policy loan information to alternatively, and in some cases more directly, examine the four hypotheses...