What Factors Affect Market Discipline in Life Insurance Markets?

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  • 何が生命保険市場の市場規律に影響しているのか
  • ナニ ガ セイメイ ホケン シジョウ ノ シジョウ キリツ ニ エイキョウ シテ イル ノ カ

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Using data from Japanese life insurance companies during 1999-2008 periods, this paper examines empirically the factors affecting life insurance market discipline (market monitoring). During the life insurance crisis, the policyholder is more sensitive to soundness of insurance companies. We find that new policyholder is more sensitive to soundness of insurance companies than existing policyholder. Finally, we find that the growth rate of whole life insurance in force is significantly related to risks of insurance companies but the growth rate of term life insurance in force is not related to risks. We conclude that the life insurance crisis, termination cost and period of insurance affect life insurance market monitoring and market discipline.

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