The Effect of the Great East Japan Earthquake on the Stock Prices of Non-life Insurance Companies

  • Atsushi Takao
  • Takuya Yoshizawa
  • Shuofen Hsu
  • Takashi Yamasaki
Original Article

DOI: 10.1057/gpp.2012.34

Cite this article as:
Takao, A., Yoshizawa, T., Hsu, S. et al. Geneva Pap Risk Insur Issues Pract (2013) 38: 449. doi:10.1057/gpp.2012.34

Abstract

The Great East Japan Earthquake of 11 March 2011 incurred huge damages for Japan. This paper investigates how this earthquake influenced the value of Japanese insurance companies, especially non-life insurance companies. Our findings are as follows. (1) The stock prices of insurance companies decreased right after the earthquake. The spread of this decrease was less for the stock prices of non-life insurance companies than for those of life insurance companies. (2) The more capital buffer a non-life insurance company had, the higher the stock return. (3) The Earthquake Insurance System on Dwelling Risks in Japan not only indemnifies seismic losses but also functions as a Japanese stock market stabiliser.

Keywords

insurance stockcatastrophestock market reactionevent studyGreat East Japan EarthquakeEarthquake Insurance System on Dwelling Risks in Japan

Copyright information

© The International Association for the Study of Insurance Economics 2012

Authors and Affiliations

  • Atsushi Takao
    • 1
  • Takuya Yoshizawa
    • 2
  • Shuofen Hsu
    • 3
  • Takashi Yamasaki
    • 1
  1. 1.Graduate School of Business Administration, Kobe UniversityHyogoJapan
  2. 2.H.S. Insurance Co. Ltd.TokyoJapan
  3. 3.Department of Risk Management and InsuranceNational Kaohsiung First University of Science and TechnologyNantz DistrictTaiwan