Derivatives Use and Corporate Performance in the Life Insurance Industry

Byun， Hee Sub; 조영현

doi:10.23842/jif.2016.27.3.003

This paper investigates whether the Korean life insurance companies' use of derivatives has effectiveness as a risk management. Empirically, we confirm that the derivatives use has a significantly positive effect on the corporate performance measured by profitability. This effect is mainly observed when the purpose of the derivatives use is risk avoidance, and when the firm has relatively small scale of assets. Additionally, we find that the derivatives use reduces the distressed assets. In the mean time, among the various types of derivatives, the currency derivatives, forwards, futures, and swap have positive effect on corporate performance. This paper provides practical implications for the life insurance companies to minimize the risk and to maximize the profit by strategically using the derivatives.

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REFERENCES (18)
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* 2021년 이후 발행 논문의 참고문헌은 현재 구축 중입니다.

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