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J. Risk Financial Manag. 2008, 1(1), 77-99; doi:10.3390/jrfm1010077

The Intra-Industry Effects of Life Insurance Company Demutualizaton

Finance Group, 413 Hayden Hall Boston, College of Business Administration, Northeastern University, MA 02115, USA
We thank participants at the Eastern Finance Association annual meeting, the Academy of Financial Services annual meeting, and an anonymous referee for helpful comments and suggestions. Emery Trahan acknowledges support from the Donald F. Harding Professorship.
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Published: 31 December 2008
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Abstract

We examine the impact of demutualization announcements by 13 life insurance companies during 1996-2000 on the value of existing stock-owned life insurance companies and companies in other segments of the insurance industry. Demutualization announcements are associated with negative stock price reactions in the days around the announcement, and with larger and positive stock price reactions in the days following announcement. Overall, the results support the contention that life insurance company demutualizations signal favorable future industry conditions and/or increased likelihood of future acquisitions for all segments of the insurance industry. Active-minded investors may use these results to develop alpha-generating investment strategies. View Full-Text
Keywords: Demutualization; stock conversion, life insurance, insurance industry Demutualization; stock conversion, life insurance, insurance industry
This is an open access article distributed under the Creative Commons Attribution License (CC BY 3.0).

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MDPI and ACS Style

Meador, J.W.; Trahan, E.A. The Intra-Industry Effects of Life Insurance Company Demutualizaton. J. Risk Financial Manag. 2008, 1, 77-99.

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J. Risk Financial Manag. EISSN 1911-8074 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
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