ABSTRACT:The purpose of this study are to investigate the patterns of the use of derivatives by Japanese insurance companies, and to examine which firms-specific factors determine the decision of Japanese insurance companies to use derivatives. Using a sample of Japanese life insurance and non life insurance companies during the period of 2001-2008, we find that the participation rate for the use of derivatives by insurance companies in Japan is 72.4%, much higher than those found in the US, the UK or Australia. Using probit regression models, we examine the determinants of the use of derivatives, and we find that the decision to use derivatives by insurance companies is positively associated with firm size, leverage, and proportion of asset invested in stock, but negatively related with asset liability mismatch. We also find that the decision of Japanese insurance companies to extend their markets to operate globally increase the need to use derivatives.

The Great East Japan Earthquake of 11 March 2011 incurred huge damages for Japan. This paper investigates how this earthquake influenced the value of Japanese insurance companies, especially non-life insurance companies. Our findings are as follows. (1) The stock prices of insurance companies decreased right after the earthquake. The spread of this decrease was less for the stock prices of non-life insurance companies than for those of life insurance companies. (2) The more capital buffer a non-life insurance company had, the higher the stock return. (3) The Earthquake Insurance System on Dwelling Risks in Japan not only indemnifies seismic losses but also functions as a Japanese stock market stabiliser.

This paper compares the two-part model (TPM) that distinguishes between users and non-users of health care, with two neural networks (TNN) that distinguish users by frequency. In the model comparisons using data from the National Health Research Institute (NHRI) in Taiwan, we find strong evidence in favor of the neural networks approach. This paper shows that the individuals in the selforganizing map (SOM) network clusters can be described as several different forms of frequency distributions. The integration model of SOM and back propagation network (BPN) proposed by this paper not only permits policymakers to easily include more risk adjusters besides the demographics in the traditional capitation formula through the adaptation and calculation power of neural networks, but also reduces the incentives for cream skimming by decreasing estimation biases.

No abstract

ABSTRACT:The purpose of this study are to investigate the patterns of the use of derivatives by Japanese insurance companies, and to examine which firms-specific factors determine the decision of Japanese insurance companies to use derivatives. Using a sample of Japanese life insurance and non life insurance companies during the period of 2001-2008, we find that the participation rate for the use of derivatives by insurance companies in Japan is 72.4%, much higher than those found in the US, the UK or Australia. Using probit regression models, we examine the determinants of the use of derivatives, and we find that the decision to use derivatives by insurance companies is positively associated with firm size, leverage, and proportion of asset invested in stock, but negatively related with asset liability mismatch. We also find that the decision of Japanese insurance companies to extend their markets to operate globally increase the need to use derivatives.