The Non-linear Impact of the Diversification of Life Insurance Companies on Solvency Risk-An Empirical Research Based on Panel Threshold Model

DOI

10.2991/icesem-18.2018.138How to use a DOI?

Keywords

Life insurance companies; Diversification; Solvency risk; Panel threshold model

Abstract

Risk dispersion and risk hedging are important goals for the diversification of life insurance companies. Based on the panel data of Chinese life insurers from 2010 to 2015, we try to explore the non-linear impacts of the diversification of life insurance companies on solvency risk under different thresholds by using the Hansen threshold model with company size as a threshold variable. The study finds out that there is a threshold effect between the diversification of life insurance companies and the solvency risk. When the company’s size is in different intervals, the diversification will have different impacts on the solvency risk, showing an inverted “U” trend. When the company is small, the new product line will increase the company's solvency risk. With the expansion of the company size, the impact of diversification on reducing solvency risk will be significant.

Copyright

© 2018, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Shuang Wu
AU  - Chao Meng
PY  - 2018/08
DA  - 2018/08
TI  - The Non-linear Impact of the Diversification of Life Insurance Companies on Solvency Risk-An Empirical Research Based on Panel Threshold Model
BT  - Proceedings of the 2018 2nd International Conference on Education Science and Economic Management (ICESEM 2018)
PB  - Atlantis Press
SP  - 602
EP  - 606
SN  - 2352-5398
UR  - https://doi.org/10.2991/icesem-18.2018.138
DO  - 10.2991/icesem-18.2018.138
ID  - Wu2018/08
ER  -