Evaluating the risk of life insurer insolvency: implications from the US for the European Union
نویسندگان
چکیده
Insolvencies of life insurers in Europe have been virtually nonexistent. The deregulation of European markets, however, is likely to dramatically alter that situation. The goal of this study is two-fold: first, to identify significant variables in the early detection of financially distressed life insurers; and second, to consider the importance of these variables to the evaluation of life insurer insolvency risk in the European Union (EU). The availability of a data sample approaching the universe of insurers in the US allows us to stratify a large sample in order to make reasonable inferences regarding the factors likely to influence insolvency experience in the EU. The most significant findings for EU consumers, regulators, and insurers relate to the importance of capital and surplus, geographic focus, asset mix, and leverage in determining the likelihood of insurer bankruptcy. © 2000 Elsevier Science B.V. All rights reserved. JEL classification: G22; G33; F36
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