Embedded value reporting quality and credit risk: evidence from life insurance companies

Tsung Kang Chen, Yijie Tseng*, Yu Shun Hung, Chun Chi Lin

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

This study investigates the effects of releasing embedded value (EV) reports and EV report disclosure quality on life insurance companies’ credit risks, using issuer credit rating and bond yield spread data from 2001 to 2010. Results show that releasing an EV report and EV report disclosure quality are both significantly and negatively associated with life insurance companies’ credit risks. In addition, the CFO Forum (2004a, 2004b, European Embedded Value) significantly strengthens the negative effect of releasing an EV report on firm credit risk while the subprime crisis has the opposite effect in Europe. Finally, the results are robust to endogeneity issues and different model specifications of fixed effects.

Original languageEnglish
JournalAccounting and Business Research
DOIs
StateAccepted/In press - 1 Jan 2020

Keywords

  • bond yield spread
  • credit risk
  • embedded value (EV)
  • EV report disclosure quality
  • life insurance company

Fingerprint Dive into the research topics of 'Embedded value reporting quality and credit risk: evidence from life insurance companies'. Together they form a unique fingerprint.

  • Cite this