Using C-Score, which is a firm-year measure of earnings conservatism developed by Khan and Watts (2009), this study examines the effect of directors' and officers' liability (D&O) insurance on earnings conservatism, and explores whether the increased litigation risk caused by firm's...

Pricing and risk management for longevity risk has increasingly become a major challenge for life insurers and pension funds around the world. Risk transfer to financial markets, with their major capacity for efficient risk pooling, is an area of significant development for a successful...

Most insurers in the European Union determine their regulatory capital requirements based on the standard formula of Solvency II. However, there is evidence that the standard formula inaccurately reflects insurers’ risk situation and may provide misleading steering incentives. In the second...

This article builds on Froot and Stein in developing a framework for analyzing the risk allocation, capital budgeting, and capital structure decisions facing insurers and reinsurers. The model incorporates three key features: (i) value-maximizing insurers and reinsurers face product-market as...

In this paper, we investigate peer effects in corporate risk management by studying reinsurance utilization in the U.S. property-casualty insurance industry due to the unique risk management feature of this industry and the statutory disclosure requirement of detailed reinsurance transactions....

limate variability and extremes, socio-economic conditions, crisis and market shocks are among the main factors determining risk in the agricultural sector. Drought, heat stress, flood, market volatility among the others, have caused heavy losses in the recent past and both the occurrence and...

The global insurance industry is undergoing fundamental change, with countries that are classified as emerging economies (such as China and other countries in the Asia-Pacific region) playing increasingly important roles. In this article, we investigate the effect of two important dimensions of...

This paper utilizes three large databases to better understand the characteristics of cyber loss events, especially how to deal with data biases and how cyber losses evolve over time. We first deal with the problem of report delay with an extended two-stage model in combination with detailed...

In this paper, we focus on pricing and hedging of Guaranteed Minimum Benefits (GMBs) and we extend the existing framework by assuming the underlying asset dynamics evolve under a regime-switching jump-diffusion environment. Two basic GMB contracts, Guaranteed Minimum Maturity Benefit (GMMB) and...

It has been shown in the empirical literature that operational losses of financial firms can cause severe reputational losses, which, however, are typically not taken into account when modeling and assessing operational risk. The aim of this paper is to fill this gap by assessing the...