{"title":"Competitive dynamics and risk of non-life insurance in Taiwan: An empirical study","authors":"Guan-Chih Chen, Mei-Chih Wang","doi":"10.1016/j.gfj.2024.101014","DOIUrl":null,"url":null,"abstract":"<div><p>This study applies the panel smooth transition regression model to a 13-year sample of 16 Taiwanese non-life insurance companies to examine market competition's impact on Asset risk.</p><p>Underwriting risk Investment risk and differentiate between financial holding companies (FHCs) and non-FHCs (NFHCs). For NFHCs, increased competition reduces asset risk in high-leverage firms, supporting the modified moral hazard hypothesis. For FHCs, greater competition lowers asset risk only above a leverage threshold, indicating superior risk management and affirming the competition stability hypothesis. The effect on underwriting and investment risks depends on operational tenure; below a certain threshold, competition increases underwriting and investment risk, whereas competition above the threshold decreases risk, showing that experience improves risk management. This study offers key insights into how competition influences risk across different types of insurance companies in Taiwan.</p></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"62 ","pages":"Article 101014"},"PeriodicalIF":5.5000,"publicationDate":"2024-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Global Finance Journal","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1044028324000863","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
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Abstract
This study applies the panel smooth transition regression model to a 13-year sample of 16 Taiwanese non-life insurance companies to examine market competition's impact on Asset risk.
Underwriting risk Investment risk and differentiate between financial holding companies (FHCs) and non-FHCs (NFHCs). For NFHCs, increased competition reduces asset risk in high-leverage firms, supporting the modified moral hazard hypothesis. For FHCs, greater competition lowers asset risk only above a leverage threshold, indicating superior risk management and affirming the competition stability hypothesis. The effect on underwriting and investment risks depends on operational tenure; below a certain threshold, competition increases underwriting and investment risk, whereas competition above the threshold decreases risk, showing that experience improves risk management. This study offers key insights into how competition influences risk across different types of insurance companies in Taiwan.
期刊介绍：
Global Finance Journal provides a forum for the exchange of ideas and techniques among academicians and practitioners and, thereby, advances applied research in global financial management. Global Finance Journal publishes original, creative, scholarly research that integrates theory and practice and addresses a readership in both business and academia. Articles reflecting pragmatic research are sought in areas such as financial management, investment, banking and financial services, accounting, and taxation. Global Finance Journal welcomes contributions from scholars in both the business and academic community and encourages collaborative research from this broad base worldwide.
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