TY - JOUR
T1 - Risk, Capital, and Operating Efficiency
T2 - Evidence from Taiwan’s Life Insurance Market
AU - Hu, Jin-Li
AU - Yu, Hsueh E.
PY - 2015/4/6
Y1 - 2015/4/6
N2 - In this article, we investigate the relationships among risk, capital, and operating efficiency for Taiwanese life insurance companies from 2004 to 2009 by using the two-stage least-square approach. We find a positive relation between inefficiency and product risk. At the same time, efficient insurers are seen as taking higher asset risk than inefficient insurers. A contrasting finding also shows that the relationship between capital and product risk is positive, while the relationship between capital and asset risk is negative. Moreover, we present a negative relationship between inefficiency and capital level, indicating that well-capitalized insurers operate more efficiently than poorly capitalized insurers.
AB - In this article, we investigate the relationships among risk, capital, and operating efficiency for Taiwanese life insurance companies from 2004 to 2009 by using the two-stage least-square approach. We find a positive relation between inefficiency and product risk. At the same time, efficient insurers are seen as taking higher asset risk than inefficient insurers. A contrasting finding also shows that the relationship between capital and product risk is positive, while the relationship between capital and asset risk is negative. Moreover, we present a negative relationship between inefficiency and capital level, indicating that well-capitalized insurers operate more efficiently than poorly capitalized insurers.
KW - Operating efficiency
KW - Product risk
KW - Two-stage least-square approach
KW - asset risk
UR - http://www.scopus.com/inward/record.url?scp=84960853540&partnerID=8YFLogxK
U2 - 10.1080/1540496X.2014.998907
DO - 10.1080/1540496X.2014.998907
M3 - Article
AN - SCOPUS:84960853540
SN - 1540-496X
VL - 51
SP - S121-S132
JO - Emerging Markets Finance and Trade
JF - Emerging Markets Finance and Trade
ER -