Chao, C. W., Lin, W. Y., and Liu, A. Y. 2013. The Impact on the Company's Long Term Performance With the Establishment of Captive Insurance Company. NTU Management Review, 24 (1): 233-256. https://doi.org/10.6226/NTURM2013.MAR.R08050
Chih-Wei Chao, Adjunct Associate Professor, Department of Insurance, Tamkang University
Wen-Yi Lin, Associate Professor, Graduate Institute of Financial and Economic Law, Feng Chia University
Y. Angela Liu, Professor, Department of Business Administration, National Chung Cheng University
Abstract
This study examines whether the establishment of a pure single-parent captive insurance
company can effectively better the parent company’s long term performance. We employ
data of U.S. exchange-listed firms that have pure single-parent captive insurance companies
registered in Bermuda between 1960 and 2007. Using matched pairs of firms with and
without captive insurance companies, our findings show that the long term performance of
the parent firm is significantly improved due to the establishment of a pure single-parent
captive insurance subsidiary, suggesting such actions provide additional benefits to parent
companies.
Keywords
captive insurancelong term performance