Ownership Structure and Control: Property-Casualty Insurer Conversion to Stock Charter

This paper examines property-casualty insurance companies that convert to stock charter from a mutual or reciprocal form of organization. Evidence shows converting firms have low surplus, significant growth in premium income, and draw down on their non-financial assets in years prior to conversion....

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Bibliographic Details
Published in:Journal of financial services research 2002-02, Vol.21 (1), p.117-144
Main Authors: Mayers, David, Smith, Clifford
Format: Article
Language:English
Subjects:
Capital costs
Capital markets
charter conversion.
Charter conversions
Charters
Compensation plans
Cost control
Customers
Dividends
Executives
Finance
Guaranty funds
Hypotheses
Incentives
Institutional investments
Insurance
Insurance industry
Insurance premiums
Mutual insurance companies
Organizational change
Ownership
ownership structure
Policyholders
Property
Property & casualty insurance
Specialization
Stockholders
Studies
Citations: Items that cite this one
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Description
Summary:This paper examines property-casualty insurance companies that convert to stock charter from a mutual or reciprocal form of organization. Evidence shows converting firms have low surplus, significant growth in premium income, and draw down on their non-financial assets in years prior to conversion. Following conversion their is significant growth in assets and the number of States licensed. The evidence suggests there can be important costs associated with the operation of a mutual or reciprocal insurance company.
ISSN:0920-8550
1573-0735
DOI:10.1023/A:1014377819009