Trust‐Preferred Securities and Insurer Financing Decisions

Hilliard, James I.; Pottier, Steven W.; Xu, Jianren

doi:10.1111/jori.12137

Cited by 4 publications

(2 citation statements)

References 35 publications

(45 reference statements)

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“…The effect of trust is mediated by risk on the consumer's intention to purchase. Second, empirical studies on trust validated there is a direct relationship between trust and willingness to purchase intangible products like insurance [45][46][47]. Therefore, the researcher expects that an increase in trustfulness will directly and through its two mediators (perceived risk and perceived benefits) affects behavioral intention towards purchasing personal insurance products.…”

Section: Trustful Belief On Insurancementioning

confidence: 99%

Decision Making in Personal Insurance: Impact of Insurance Literacy

et al. 2019

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Financial illiteracy and underinsurance have been revealed to be critical issues in the financial sustainability and well-being of families. However, studies show that financial literacy does not necessarily translate to insurance literacy, and more specialized education can improve insurance literacy. Little is known about the impact of insurance illiteracy on the inclination to seek and retain insurance. Considering this gap, our study aimed to investigate the direct and indirect effect of consumers’ insurance literacy on purchasing decisions of personal insurance. The study sample consists of middle-class consumers in Sri Lanka. A total of 300 valid questionnaires were collected and analyzed using a variance-based structural equation modeling. The results revealed that insurance literacy directly, and through its mediators of trust, perceived benefits, and favorable attitudes towards insurance, impacts the behavioral intention, significantly and positively. The cognition-based trust affected the purchase intention only through its mediators. Additionally, there is a significant difference between those who are having and not having insurance in terms of insurance literacy, trustfulness, and perceived value of insurance. This study is relatively a pioneer study, and findings will be of great interest to academicians and policymakers to encourage personal insurance as a tool in achieving financial security and well-being

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Section: Trustful Belief On Insurancementioning

confidence: 99%

Decision Making in Personal Insurance: Impact of Insurance Literacy

et al. 2019

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“…Also, the market reacts to changes in financial strength ratings (Halek & Eckles, 2010). Furthermore, rating agencies may serve as shadow regulators; the inclusion of certain features in the rating criteria like ERM to improve solvency may result in positive abnormal returns among the insurers with those features (Hilliard et al, 2018). We, therefore, propose that the Best's announcement of considering ERM in financial strength ratings is a significantly important event to insurance firms.…”

Section: Background and Hypothesis Developmentmentioning

confidence: 99%

Market reactions to enterprise risk management adoption, incorporation by rating agencies, and ORSA Act passage

Eastman

2021

Risk Manage Insurance Review

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Prior literature on Enterprise Risk Management's (ERM) value implications focuses on cost–benefit analyses of implementing an ERM program. We take a novel approach by examining the implementation dynamics and study whether the timing of firms' adoption affects ERM's value implication. We find that firms experienced positive (negative) abnormal returns when adopting ERM following (before) 2005 when Standard & Poor's (S&P) issued their ERM‐related rating criteria. We also find evidence that ERM firms experienced positive abnormal market reactions to this rating criteria change by S&P but find no evidence for the following change by A.M. Best. In addition, our study documents that the market rewarded ERM adopters and penalized nonadopters after November 2011 on key dates leading to the passage of the Own Risk Solvency Assessment (ORSA) Act when there was less uncertainty regarding ultimate passage of the Act. Overall, our results imply that the capital market's view on ERM is shaped by rating agency and regulatory changes. Our findings are also consistent with the view that investors gain a greater understanding of ERM over time.

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Event Studies for Publicly Traded Insurers: An Investigation of the Bad-Model Problem

Chen,

Pottier

2023

North American Actuarial Journal

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Trust‐Preferred Securities and Insurer Financing Decisions

Cited by 4 publications

References 35 publications

Decision Making in Personal Insurance: Impact of Insurance Literacy

Decision Making in Personal Insurance: Impact of Insurance Literacy

Market reactions to enterprise risk management adoption, incorporation by rating agencies, and ORSA Act passage

Event Studies for Publicly Traded Insurers: An Investigation of the Bad-Model Problem

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