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@article{ART002623746},
author={Injung Song and Chungwan Hong},
title={The Effect of The U.S. Property Liability Insurer's Product-diversification on the derivatives usage},
journal={Journal of Insurance and Finance},
issn={2384-3209},
year={2020},
volume={31},
number={3},
pages={77-101},
doi={10.23842/jif.2020.31.3.003}

TY - JOUR
AU - Injung Song
AU - Chungwan Hong
TI - The Effect of The U.S. Property Liability Insurer's Product-diversification on the derivatives usage
JO - Journal of Insurance and Finance
PY - 2020
VL - 31
IS - 3
PB - Korea Insurance Research Institute
SP - 77
EP - 101
SN - 2384-3209
AB - This paper examines the effect of the U.S. property and liability insurance companies’ product diversification on financial derivatives usage. Prior studies discussed the diversification of the firm but have not incorporated its relation with the derivatives particularly for options. We focus on the firms' product diversification with the use of options and reinsurance for hedging purposes. This paper finds the following evidence. First, there is no significant evidence of diversification effect using all types of derivatives. Second, firms' product diversification is positively associated with the options. This implies that diversified firms are exposed to greater asset risk which results in increased demand for options to hedge. Last, there exists a negative relation between reinsurance and options supporting that they are considered as substitutes.
KW - Property and Liability Insurance Company;Derivatives;Hedging;Diversification;Reinsurance;Option
DO - 10.23842/jif.2020.31.3.003
ER -

Injung Song and Chungwan Hong. (2020). The Effect of The U.S. Property Liability Insurer's Product-diversification on the derivatives usage. Journal of Insurance and Finance, 31(3), 77-101.

Injung Song and Chungwan Hong. 2020, "The Effect of The U.S. Property Liability Insurer's Product-diversification on the derivatives usage", Journal of Insurance and Finance, vol.31, no.3 pp.77-101. Available from: doi:10.23842/jif.2020.31.3.003

Injung Song, Chungwan Hong "The Effect of The U.S. Property Liability Insurer's Product-diversification on the derivatives usage" Journal of Insurance and Finance 31.3 pp.77-101 (2020) : 77.

Injung Song, Chungwan Hong. The Effect of The U.S. Property Liability Insurer's Product-diversification on the derivatives usage. 2020; 31(3), 77-101. Available from: doi:10.23842/jif.2020.31.3.003

Injung Song and Chungwan Hong. "The Effect of The U.S. Property Liability Insurer's Product-diversification on the derivatives usage" Journal of Insurance and Finance 31, no.3 (2020) : 77-101.doi: 10.23842/jif.2020.31.3.003

Injung Song; Chungwan Hong. The Effect of The U.S. Property Liability Insurer's Product-diversification on the derivatives usage. Journal of Insurance and Finance, 31(3), 77-101. doi: 10.23842/jif.2020.31.3.003

Injung Song; Chungwan Hong. The Effect of The U.S. Property Liability Insurer's Product-diversification on the derivatives usage. Journal of Insurance and Finance. 2020; 31(3) 77-101. doi: 10.23842/jif.2020.31.3.003

Injung Song, Chungwan Hong. The Effect of The U.S. Property Liability Insurer's Product-diversification on the derivatives usage. 2020; 31(3), 77-101. Available from: doi:10.23842/jif.2020.31.3.003

Injung Song and Chungwan Hong. "The Effect of The U.S. Property Liability Insurer's Product-diversification on the derivatives usage" Journal of Insurance and Finance 31, no.3 (2020) : 77-101.doi: 10.23842/jif.2020.31.3.003