The Experts below are selected from a list of 3138 Experts worldwide ranked by ideXlab platform
Karen K Nelson - One of the best experts on this subject based on the ideXlab platform.
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management of the loss reserve accrual and the distribution of earnings in the property Casualty Insurance industry
Journal of Accounting and Economics, 2003Co-Authors: William H Beaver, Maureen F. Mcnichols, Karen K NelsonAbstract:Abstract We document that property-Casualty insurers with small positive earnings understate loss reserves relative to insurers with small negative earnings. Furthermore, loss reserves are managed across the entire distribution of earnings, with the most income-increasing reserve accruals reported by small profit firms, and the most income-decreasing reserve accruals reported by firms with the highest earnings. We analyze this pattern separately for public, private, and mutual companies, and find that public companies and mutuals manage loss reserves to avoid losses, but that private companies do not. We also find evidence of reserve management to avoid losses by financially healthy and distressed firms.
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management of the loss reserve accrual and the distribution of earnings in the property Casualty Insurance industry
Social Science Research Network, 2000Co-Authors: William H Beaver, Maureen F. Mcnichols, Karen K NelsonAbstract:We document that firms reporting small positive earnings significantly understate the loss reserve accrual. Our findings also indicate that earnings management is not concentrated in these firms, but is pervasive across the entire earnings distribution. Consistent with income smoothing, the firms in the left tail of the earnings distribution understate reserve accruals while those in the right tail overstate reserve accruals. The results are similar for both stock and mutual insurers. We also show that both financially healthy and distressed firms manage earnings to avoid losses, and that both types of firms contribute to an overall appearance of income smoothing and opportunistic regulatory reporting.
Scott E Harrington - One of the best experts on this subject based on the ideXlab platform.
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Insurance price volatility and underwriting cycles
2013Co-Authors: Scott E Harrington, Greg NiehausAbstract:This chapter reviews the literature on underwriting cycles and volatility in property-Casualty Insurance prices and profits. It provides a conceptual framework for assessing unexplained and possibly cyclical variation. It summarizes time series evidence of whether underwriting results follow a second-order autoregressive process and illustrates these findings using US property-Casualty Insurance market data during 1955–2009. The chapter then considers (1) evidence of whether underwriting results are stationary or cointegrated with macroeconomic factors, (2) theoretical and empirical work on the effects of shocks to capital on Insurance supply, and (3) research on the extent and causes of price reductions during soft markets.
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market discipline in property Casualty Insurance evidence from premium growth surrounding changes in financial strength ratings
Journal of Money Credit and Banking, 2006Co-Authors: Karen Epermanis, Scott E HarringtonAbstract:Analysis of abnormal premium growth surrounding changes in financial strength ratings for a large panel of property/Casualty insurers generally indicates significant premium declines in the year of and the year following rating downgrades. Consistent with greater risk sensitivity of demand, premium declines were concentrated among commercial Insurance, which has narrower guaranty fund protection than personal Insurance. Premium declines were greater for firms with low pre-downgrade ratings, and especially pronounced for firms falling below an A- rating. There is no evidence of moral hazard in the form of rapid commercial or personal lines premium growth following downgrades of A- or low-rated insurers.
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market discipline in property Casualty Insurance evidence from premium growth surrounding changes in financial strength ratings
Social Science Research Network, 2005Co-Authors: Karen Epermanis, Scott E HarringtonAbstract:We analyze abnormal premium growth surrounding changes in A.M. Best Company financial strength ratings for a large panel of property/Casualty insurers during 1992-1999. Control group comparisons and regression estimates generally indicate economically and statistically significant premium declines in the year of and the year following rating downgrades. Consistent with greater risk sensitivity of demand, the premium declines were concentrated among commercial Insurance, which has less complete guaranty fund protection than personal Insurance. The premium declines were greater for firms with relatively low pre-downgrade ratings, and particularly pronounced for firms falling below an A-rating. We find no evidence of moral hazard in the form of rapid commercial or personal lines premium growth following downgrades of A- or low-rated insurers. There is some evidence that rating upgrades for relatively low-rated insurers were accompanied by increased premium growth. The overall results suggest significant market discipline for rated insurers, in particular for commercial Insurance.
William H Beaver - One of the best experts on this subject based on the ideXlab platform.
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management of the loss reserve accrual and the distribution of earnings in the property Casualty Insurance industry
Journal of Accounting and Economics, 2003Co-Authors: William H Beaver, Maureen F. Mcnichols, Karen K NelsonAbstract:Abstract We document that property-Casualty insurers with small positive earnings understate loss reserves relative to insurers with small negative earnings. Furthermore, loss reserves are managed across the entire distribution of earnings, with the most income-increasing reserve accruals reported by small profit firms, and the most income-decreasing reserve accruals reported by firms with the highest earnings. We analyze this pattern separately for public, private, and mutual companies, and find that public companies and mutuals manage loss reserves to avoid losses, but that private companies do not. We also find evidence of reserve management to avoid losses by financially healthy and distressed firms.
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management of the loss reserve accrual and the distribution of earnings in the property Casualty Insurance industry
Social Science Research Network, 2000Co-Authors: William H Beaver, Maureen F. Mcnichols, Karen K NelsonAbstract:We document that firms reporting small positive earnings significantly understate the loss reserve accrual. Our findings also indicate that earnings management is not concentrated in these firms, but is pervasive across the entire earnings distribution. Consistent with income smoothing, the firms in the left tail of the earnings distribution understate reserve accruals while those in the right tail overstate reserve accruals. The results are similar for both stock and mutual insurers. We also show that both financially healthy and distressed firms manage earnings to avoid losses, and that both types of firms contribute to an overall appearance of income smoothing and opportunistic regulatory reporting.
Maureen F. Mcnichols - One of the best experts on this subject based on the ideXlab platform.
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management of the loss reserve accrual and the distribution of earnings in the property Casualty Insurance industry
Journal of Accounting and Economics, 2003Co-Authors: William H Beaver, Maureen F. Mcnichols, Karen K NelsonAbstract:Abstract We document that property-Casualty insurers with small positive earnings understate loss reserves relative to insurers with small negative earnings. Furthermore, loss reserves are managed across the entire distribution of earnings, with the most income-increasing reserve accruals reported by small profit firms, and the most income-decreasing reserve accruals reported by firms with the highest earnings. We analyze this pattern separately for public, private, and mutual companies, and find that public companies and mutuals manage loss reserves to avoid losses, but that private companies do not. We also find evidence of reserve management to avoid losses by financially healthy and distressed firms.
-
management of the loss reserve accrual and the distribution of earnings in the property Casualty Insurance industry
Social Science Research Network, 2000Co-Authors: William H Beaver, Maureen F. Mcnichols, Karen K NelsonAbstract:We document that firms reporting small positive earnings significantly understate the loss reserve accrual. Our findings also indicate that earnings management is not concentrated in these firms, but is pervasive across the entire earnings distribution. Consistent with income smoothing, the firms in the left tail of the earnings distribution understate reserve accruals while those in the right tail overstate reserve accruals. The results are similar for both stock and mutual insurers. We also show that both financially healthy and distressed firms manage earnings to avoid losses, and that both types of firms contribute to an overall appearance of income smoothing and opportunistic regulatory reporting.
Karen Epermanis - One of the best experts on this subject based on the ideXlab platform.
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market discipline in property Casualty Insurance evidence from premium growth surrounding changes in financial strength ratings
Journal of Money Credit and Banking, 2006Co-Authors: Karen Epermanis, Scott E HarringtonAbstract:Analysis of abnormal premium growth surrounding changes in financial strength ratings for a large panel of property/Casualty insurers generally indicates significant premium declines in the year of and the year following rating downgrades. Consistent with greater risk sensitivity of demand, premium declines were concentrated among commercial Insurance, which has narrower guaranty fund protection than personal Insurance. Premium declines were greater for firms with low pre-downgrade ratings, and especially pronounced for firms falling below an A- rating. There is no evidence of moral hazard in the form of rapid commercial or personal lines premium growth following downgrades of A- or low-rated insurers.
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market discipline in property Casualty Insurance evidence from premium growth surrounding changes in financial strength ratings
Social Science Research Network, 2005Co-Authors: Karen Epermanis, Scott E HarringtonAbstract:We analyze abnormal premium growth surrounding changes in A.M. Best Company financial strength ratings for a large panel of property/Casualty insurers during 1992-1999. Control group comparisons and regression estimates generally indicate economically and statistically significant premium declines in the year of and the year following rating downgrades. Consistent with greater risk sensitivity of demand, the premium declines were concentrated among commercial Insurance, which has less complete guaranty fund protection than personal Insurance. The premium declines were greater for firms with relatively low pre-downgrade ratings, and particularly pronounced for firms falling below an A-rating. We find no evidence of moral hazard in the form of rapid commercial or personal lines premium growth following downgrades of A- or low-rated insurers. There is some evidence that rating upgrades for relatively low-rated insurers were accompanied by increased premium growth. The overall results suggest significant market discipline for rated insurers, in particular for commercial Insurance.