The first part of the dissertation aims to determine whether and how variances in reinsurance rel... more The first part of the dissertation aims to determine whether and how variances in reinsurance relationships impact insurers' financial performance during the sample period of 2002-2012. Such impact on insurers' financial performance is measured by accounting measurements of ROA and ROE and by the efficiency scores (cost, revenue, and profit) estimated using data envelopment analysis (DEA). This essay analyzes how the usage of captive reinsurance affects life insurers' firm performance using multivariate regression model. Results show that firm performance is negatively related to captive reinsurance arrangements. The second essay analyzes the value effects of mergers and acquisitions (M&As) in the global insurance industry by conducting an event study of M&A transactions that occurred during the period of 1990-2014, including two M&A waves before the financial crisis and the M&A activities after it. Our results show that (1) M&As are value-enhancing for both acquirers an...
Center for Financial Institutions Working …, 1996
Productivity and Technical Efficiency in the Italian Insurance Industry. Author info | Abstract |... more Productivity and Technical Efficiency in the Italian Insurance Industry. Author info | Abstract | Publisher info | Download info | Related research | Statistics. Author Info. J. David Cummins Giuseppe Turchetti Additional information ...
Abstract: Underwriting cycles are associated with a mystique that few topics in the area of risk ... more Abstract: Underwriting cycles are associated with a mystique that few topics in the area of risk and insurance share. Many explanations and theories have focused on underwriting cycles, but little research exists to discern the relative importance of these theories in explaining insurance pricing and profitability. This research provides an intuitive review of the existing literature on underwriting cycles in the context of a demand and supply model. Specific, unaddressed issues about underwriting cycles are raised in the literature reviewed.
other NAIC staff for their comments and contributions to this research. Any mistakes are solely t... more other NAIC staff for their comments and contributions to this research. Any mistakes are solely the responsibility of the author.
This paper examines the relationship between mergers and acquisitions, efficiency, and scale econ... more This paper examines the relationship between mergers and acquisitions, efficiency, and scale economies in the US life insurance industry. We estimate cost and revenue efficiency for life insurers representing 80 percent of industry assets over the period 1988-1995 using data envelopment analysis (DEA) and decompose cost efficiency into pure technical, scale, and allocative efficiency. The Malmquist index methodology is used to measure changes in efficiency and productivity over time. The results support the hypothesis that acquired firms achieve greater efficiency gains than firms that have not engaged in merger or acquisition activity. We also find evidence that firms operating with non-decreasing returns to scale are more likely to be acquisition targets than firms operating with decreasing returns to scale. Firms with higher revenue efficiency are more likely to be acquired than firms with lower revenue efficiency, but we find no relationship between other types of efficiency and...
The Wharton Financial Institutions Center provides a multidisciplinary research approach to the p... more The Wharton Financial Institutions Center provides a multidisciplinary research approach to the problems and opportunities facing the financial services industry in its search for competitive excellence. The Center's research focuses on the issues related to managing risk at the firm level as well as ways to improve productivity and performance. The Center fosters the development of a community of faculty, visiting scholars and Ph.D. candidates whose research interests complement and support the mission of the Center. The Center works closely with industry executives and practitioners to ensure that its research is informed by the operating realities and competitive demands facing industry participants as they pursue competitive excellence. A variety of working papers related to this subject are also available online at: If you would like to learn more about the Center or become a member of our research community, please let us know of your interest. Abstract This paper presents...
This paper examines the relationship between mergers and acquisitions, efficiency, and scale econ... more This paper examines the relationship between mergers and acquisitions, efficiency, and scale economies,in the US life insurance industry. We estimate cost and revenue efficiency for life insurers representing 80 percent of industry assets over the period 1988-1995 using data envelopment analysis (DEA) and decompose cost efficiency into pure technical, scale, and allocative efficiency. The Malmquist index methodology,is used to measure changes in efficiency and productivity over time. The results support the hypothesis that acquired firms achieve greater efficiency gains than firms that have not engaged in merger or acquisition activity. We also find evidence that firms operating with non-decreasing returns to scale are more likely to be acquisition targets than firms operating with decreasing returns to scale. Firms with higher revenue efficiency are more likely to be acquired than firms with lower revenue efficiency, but we find no relationship between other types of efficiency and...
Underwriting cycles are associated with a mystique that few topics in the area of risk and insura... more Underwriting cycles are associated with a mystique that few topics in the area of risk and insurance share. Many explanations and theories have focused on underwriting cycles, but little research exists to discern the relative importance of these theories in explaining insurance pricing and profitability. This research provides an intuitive review of the existing literature on underwriting cycles in the context of a demand and supply model. Specific, unaddressed issues about underwriting cycles are raised in the literature reviewed.
The first part of the dissertation aims to determine whether and how variances in reinsurance rel... more The first part of the dissertation aims to determine whether and how variances in reinsurance relationships impact insurers' financial performance during the sample period of 2002-2012. Such impact on insurers' financial performance is measured by accounting measurements of ROA and ROE and by the efficiency scores (cost, revenue, and profit) estimated using data envelopment analysis (DEA). This essay analyzes how the usage of captive reinsurance affects life insurers' firm performance using multivariate regression model. Results show that firm performance is negatively related to captive reinsurance arrangements. The second essay analyzes the value effects of mergers and acquisitions (M&As) in the global insurance industry by conducting an event study of M&A transactions that occurred during the period of 1990-2014, including two M&A waves before the financial crisis and the M&A activities after it. Our results show that (1) M&As are value-enhancing for both acquirers an...
Center for Financial Institutions Working …, 1996
Productivity and Technical Efficiency in the Italian Insurance Industry. Author info | Abstract |... more Productivity and Technical Efficiency in the Italian Insurance Industry. Author info | Abstract | Publisher info | Download info | Related research | Statistics. Author Info. J. David Cummins Giuseppe Turchetti Additional information ...
Abstract: Underwriting cycles are associated with a mystique that few topics in the area of risk ... more Abstract: Underwriting cycles are associated with a mystique that few topics in the area of risk and insurance share. Many explanations and theories have focused on underwriting cycles, but little research exists to discern the relative importance of these theories in explaining insurance pricing and profitability. This research provides an intuitive review of the existing literature on underwriting cycles in the context of a demand and supply model. Specific, unaddressed issues about underwriting cycles are raised in the literature reviewed.
other NAIC staff for their comments and contributions to this research. Any mistakes are solely t... more other NAIC staff for their comments and contributions to this research. Any mistakes are solely the responsibility of the author.
This paper examines the relationship between mergers and acquisitions, efficiency, and scale econ... more This paper examines the relationship between mergers and acquisitions, efficiency, and scale economies in the US life insurance industry. We estimate cost and revenue efficiency for life insurers representing 80 percent of industry assets over the period 1988-1995 using data envelopment analysis (DEA) and decompose cost efficiency into pure technical, scale, and allocative efficiency. The Malmquist index methodology is used to measure changes in efficiency and productivity over time. The results support the hypothesis that acquired firms achieve greater efficiency gains than firms that have not engaged in merger or acquisition activity. We also find evidence that firms operating with non-decreasing returns to scale are more likely to be acquisition targets than firms operating with decreasing returns to scale. Firms with higher revenue efficiency are more likely to be acquired than firms with lower revenue efficiency, but we find no relationship between other types of efficiency and...
The Wharton Financial Institutions Center provides a multidisciplinary research approach to the p... more The Wharton Financial Institutions Center provides a multidisciplinary research approach to the problems and opportunities facing the financial services industry in its search for competitive excellence. The Center's research focuses on the issues related to managing risk at the firm level as well as ways to improve productivity and performance. The Center fosters the development of a community of faculty, visiting scholars and Ph.D. candidates whose research interests complement and support the mission of the Center. The Center works closely with industry executives and practitioners to ensure that its research is informed by the operating realities and competitive demands facing industry participants as they pursue competitive excellence. A variety of working papers related to this subject are also available online at: If you would like to learn more about the Center or become a member of our research community, please let us know of your interest. Abstract This paper presents...
This paper examines the relationship between mergers and acquisitions, efficiency, and scale econ... more This paper examines the relationship between mergers and acquisitions, efficiency, and scale economies,in the US life insurance industry. We estimate cost and revenue efficiency for life insurers representing 80 percent of industry assets over the period 1988-1995 using data envelopment analysis (DEA) and decompose cost efficiency into pure technical, scale, and allocative efficiency. The Malmquist index methodology,is used to measure changes in efficiency and productivity over time. The results support the hypothesis that acquired firms achieve greater efficiency gains than firms that have not engaged in merger or acquisition activity. We also find evidence that firms operating with non-decreasing returns to scale are more likely to be acquisition targets than firms operating with decreasing returns to scale. Firms with higher revenue efficiency are more likely to be acquired than firms with lower revenue efficiency, but we find no relationship between other types of efficiency and...
Underwriting cycles are associated with a mystique that few topics in the area of risk and insura... more Underwriting cycles are associated with a mystique that few topics in the area of risk and insurance share. Many explanations and theories have focused on underwriting cycles, but little research exists to discern the relative importance of these theories in explaining insurance pricing and profitability. This research provides an intuitive review of the existing literature on underwriting cycles in the context of a demand and supply model. Specific, unaddressed issues about underwriting cycles are raised in the literature reviewed.
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