Determinants of the Reinsurance Decisions of Korean Life Insurance Companies

Hyunjee Park (박현지); Sohn,Wook (손욱)

doi:10.23842/jif.2020.31.4.002

Determinants of the Reinsurance Decisions of Korean Life Insurance Companies

Journal of Insurance and Finance
2020, 31(4), pp.39-82
DOI : 10.23842/jif.2020.31.4.002
Publisher : Korea Insurance Research Institute
Research Area : Social Science > Business Management
Received : April 16, 2020
Accepted : November 20, 2020
Published : November 30, 2020

Hyunjee Park ¹, Sohn,Wook ²

¹코리안리
²한국개발연구원국제정책대학원대학교

Accredited

ABSTRACT

This paper examines how company-specific features of Korean life insurance companies are associated with companies’ use of reinsurance. Using panel data covering 372 firm-year observations for the eighteen consecutive years from 2001 to 2018, we perform Hausman-Taylor instrumental variable estimation. We observe that higher underwriting risk, lower solvency ratio, higher financial leverage, smaller firm size, and more diversified portfolios are associated with greater use of reinsurance. In addition, It seems that life insurance companies that are a part of financial conglomerates buy more reinsurance, while foreign-owned life insurers retain more risk. Being the first empirical reinsurance study using Korean life insurance company data, this research implies that various company-specific characteristics should be considered in reinsurance decision-making in the changing life insurance market environment in Korea.

KEYWORDS

Reinsurance Decision, Life Insurance Companies, Korea

Citation status

* References for papers published after 2023 are currently being built.

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Journal of Insurance and Finance 2023 KCI Impact Factor : 0.59

Determinants of the Reinsurance Decisions of Korean Life Insurance Companies

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* References for papers published after 2023 are currently being built.

Journal of Insurance and Finance 2023 KCI Impact Factor : 0.59

Determinants of the Reinsurance Decisions of Korean Life Insurance Companies

ABSTRACT

KEYWORDS

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