Intangible assets and firm asset risk taking: An analysis of property and liability insurance firms

Authors

Tong Yu, University of Rhode Island
Bingxuan Lin, University of Rhode Island Narragansett Bay Campus
Henry R. Oppenheimer, University of Rhode Island
Xuanjuan Chen, University of Rhode Island

Document Type

Article

Date of Original Version

3-1-2008

Abstract

Intangible assets facilitate insurers' capacity to retain existing business and attract new clients. In this study we analyze how the incentives to protect intangible assets affect asset risk-taking behavior of property and liability insurers. The result supports the view that insurers' incentives to protect their intangible assets lead to an inverse relation between intangible assets and asset risk. Consistent with the view that highly levered firms may go for broke, asset risk of highly levered insurers is less elastic to intangible assets than that of lower-levered insurers. An additional notable finding of our article is that tangible factors like firm size and capitalization increase insurers' appetites for asset risk taking. © The American Risk and Insurance Review, 2008.

Publication Title, e.g., Journal

Risk Management and Insurance Review

Volume

11

Issue

1

Citation/Publisher Attribution

Yu, Tong, Bingxuan Lin, Henry R. Oppenheimer, and Xuanjuan Chen. "Intangible assets and firm asset risk taking: An analysis of property and liability insurance firms." Risk Management and Insurance Review 11, 1 (2008): 157-178. doi: 10.1111/j.1540-6296.2008.00136.x.