We investigate the relation between investor sentiment and property-liability insurers' loss reserves. We use the Michigan Consumer Confidence Index as a proxy for sentiment, we show that during high sentiment periods, property-liability insurers intend to under-estimate loss reserves. In...

In addition to premiums, investment income is one of the two main sources of capital for property-casualty (P/C) insurance companies. This study investigates short-term equity trading behavior of P/C insurers in the United States in 2007 and 2008, and finds that over 27 percent of non-group...