246 /342
美國產險業
CEO
更迭與再保險需求
246
1. Introduction
This paper examines the impact of chief executive officer (CEO) turnover on
reinsurance demand in the property casualty insurance industry. Managers of the insurance
industry should operate insurance companies on a financially sound basis to provide
financial protection to policyholders and other stakeholders. Reinsurance is not only a
traditional hedging instrument available to primary insurers but also a means to reduce the
insolvency risk of primary insurers by stabilizing loss experience, limiting claim liabilities,
and protecting insurers against catastrophes (e.g., Niehaus and Mann, 1992; Drechsler and
Cummins, 2008). Reinsurance effectively serves as a substitute for equity capital, because
the transfer of risk from insurers to reinsurers reduces the strain on the capital of the insurer
(Adiel, 1996).
A large body of research focuses on various topics related to reinsurance decisions such
as organizational structure, motivation of purchasing reinsurance, tax shield, comparative
advantages, corporate governance and executive compensations.
1
Very few studies have
investigated the relation between CEO turnover and reinsurance demand except He and
Sommer (2011), who examine the impact of reinsurance decision on CEO turnover. In other
words, they use CEO turnover as dependent variable and reinsurance demand as independent
variable.
2
This paper utilizes reinsurance demand as dependent variable and CEO turnover as
independent variable.
The main purpose of this study is to examine the relation between CEO turnover and
reinsurance policy. CEOs substantially influence major corporate policies. In particular, a
CEO can significantly affect corporate policies of risk management, including reinsurance
purchases of an insurance company. It is very important to know the reinsurance policy after
CEO turnover because all the stakeholders (owners, policyholders, regulators, and
employees) would be affected. If new CEOs choose to purchase less reinsurance, then the
1 The literature includes Mayers and Smith (1981), Hansmann (1985), Hoerger, Sloan, and Hassan (1990),
Mayers and Smith (1990), Adiel (1996), Adams (1996), Chen, Hamwi, and Hudson (2001), Garven and
Lamm-Tennant (2003), Shortridge and Avila (2004), Cole and McCullough (2006), Cole, McCullough,
and Powell (2010), Garven, Hiliard, and Grace (2014), Powell and Sommer (2007), Adams, Hardwick,
and Zou (2008), Cummins, Dionne, Gagné, and Nouira (2008), Wang, Chang, Lai, and Tzeng (2008),
Shiu (2011), Lonkani, Ho, Lai, and Limpaphayom (2012), Ho and Lai (2014), and Ho (2016).
2 He and Sommer (2011) find a positive relation between reinsurance and non-routine CEO turnover.
Cheng, Cummins, and Lin (2017) extend He and Sommer (2011) using a more detailed decomposition of
ownership categories (e.g., family-member CEO, non-family CEO) to discuss CEO turnover. They
exclude the reinsurance variable from the regression, because they find the variable to be statistically
insignificant.