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Investment Earnings and the Characteristics
of Life Insurance Firms: New Zealand Evidence
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by Mike Adams
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Abstract
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This study examines the relationship between the investment
earnings of life insurance firms in New Zealand and their
organisational characteristics. Using data for the period 1988 -
1993, a pooled Weighted Least Squares regression model is
estimated. Consistent with expectations, the empirical results
indicate that investment earnings were higher for stock companies
than for mutuals. They were also positively associated with the
size, leverage and underwriting risk of life insurance firms. Life
insurance firms holding proportionately more financial than
non-financial assets have low investment yields. The liability
structure of life insurance firms was unrelated to their
investment earnings.
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Keywords
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LIFE INSURANCE; INVESTMENT EARNINGS; NEW ZEALAND.
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Contact Details
Mike Adams
Department of Accounting and Finance
Glasgow Business School
University of Glasgow
65 - 71 Southpark Avenue
Glasgow, G12 8LE
United Kingdom
Email: M.B.Adams@accfin.gla.ac.uk
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The comments of Steven Cahan, Linda Caradus, Arthur Davis, Paul
Dunmore, Hans-Jurgen Engelbrecht, Ivan Hoshek, Mahmud Hossain,
Mike Pickford, Bill Rees, Leigh Roberts, Greg Whittred, and two
anonymous referees on earlier drafts of this paper are gratefully
acknowledged, as is the computer assistance of Andrew Rowatt. The
study also benefited from comments of participants at seminars
hosted by Price Waterhouse (Wellington, New Zealand) and the
Cardiff Business School, University of Wales, United Kingdom. The
financial support of Price Waterhouse for my research on the New
Zealand life insurance industry is also very much appreciated.
Finally, the normal caveat applies.
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This page was last updated in November, 1996.
Copyright © The Australian Graduate School of Management
Phone: +61 2 9931 9200; Email: eajm@agsm.unsw.edu.au
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