Foreign exchange exposure: Evidence from the U.S. insurance industry

Li, D; Moshirian, F; Wee, T; Wu, E

Foreign exchange exposure: Evidence from the U.S. insurance industry

Li, D Moshirian, F Wee, T Wu, E

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Publisher:: Elsevier
Publication Type:: Journal Article
Citation:: Journal of International Financial Markets, Institutions and Money, 2009, 19 (2), pp. 306 - 320
Issue Date:: 2009-01

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Field	Value	Language
dc.contributor.author	Li, D	en_US
dc.contributor.author	Moshirian, F	en_US
dc.contributor.author	Wee, T	en_US
dc.contributor.author	Wu, E	en_US
dc.date.issued	2009-01	en_US
dc.identifier.citation	Journal of International Financial Markets, Institutions and Money, 2009, 19 (2), pp. 306 - 320	en_US
dc.identifier.issn	1042-4431	en_US
dc.identifier.uri	http://hdl.handle.net/10453/15854
dc.description.abstract	We study the foreign exchange exposure of U.S. insurers. The evidence shows that no systematic difference exists in the currency risk profiles of life and non-life segments within the insurance industry. This suggests that life and non-life insurers have similar risk exposure management strategies arising from similar risk pooling and financial intermediary functions. The empirical results reveal that a sizable proportion of U.S. insurers are exposed to foreign exchange movements against the seven largest U.S. trade partners in insurance services (U.K., Japan, Switzerland, Netherlands, France, Germany and Canada). Significant operational and size effects are also documented and we find that the frequency of foreign exchange exposure increases with time horizon.	en_US
dc.publisher	Elsevier	en_US
dc.relation.ispartof	Journal of International Financial Markets, Institutions and Money	en_US
dc.relation.isbasedon	10.1016/j.intfin.2008.01.003	en_US
dc.rights	Elsevier required licence: © 2009 . This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/. The definitive publisher version is available online at https://doi.org/10.1016/j.intfin.2008.01.003	en_US
dc.subject.classification	Finance	en_US
dc.title	Foreign exchange exposure: Evidence from the U.S. insurance industry	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	19	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1402 Applied Economics	en_US
dc.location.activity	Sydney, NSW, Australia
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	open_access
pubs.consider-herdc	false	en_US
pubs.issue	2	en_US
pubs.volume	19	en_US

Abstract:

We study the foreign exchange exposure of U.S. insurers. The evidence shows that no systematic difference exists in the currency risk profiles of life and non-life segments within the insurance industry. This suggests that life and non-life insurers have similar risk exposure management strategies arising from similar risk pooling and financial intermediary functions. The empirical results reveal that a sizable proportion of U.S. insurers are exposed to foreign exchange movements against the seven largest U.S. trade partners in insurance services (U.K., Japan, Switzerland, Netherlands, France, Germany and Canada). Significant operational and size effects are also documented and we find that the frequency of foreign exchange exposure increases with time horizon.

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http://hdl.handle.net/10453/15854