SHORT-TERM EQUITY TRADING PRACTICES OF INSTITUTIONAL INVESTORS: EVIDENCE FROM PROPERTY-CASUALTY INSURERS IN THE UNITED STATES
In addition to premiums, investment income is one of the two main sources of capital for property-casualty (P/C) insurance companies. This study investigates short-term equity trading behavior of P/C insurers in the United States in 2007 and 2008, and finds that over 27 percent of non-group affilia...
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Faculty of Economics, University of Tuzla
2013-11-01
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| Series: | Economic Review |
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| Online Access: | http://er.ef.untz.ba/index.php/er/article/view/152 |
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| author | Jin Park Tim Query |
| author_facet | Jin Park Tim Query |
| author_sort | Jin Park |
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In addition to premiums, investment income is one of the two main sources of capital for property-casualty (P/C) insurance companies. This study investigates short-term equity trading behavior of P/C insurers in the United States in 2007 and 2008, and finds that over 27 percent of non-group affiliated insurers engage in short-term equity trading activity. When it comes to the medium of short-term equity trading, stocks categorized as Industrial and Miscellaneous Stocks are the most frequently utilized with Financial Institutions’ stocks a distant second. This is due to a larger number of stocks falling under these two categories. However, in terms of the mean size of transactions, the average investment in preferred stock ranges from four to five times larger than that of common stocks during the period of interest in this study. The mean holding period for short-term common equity transaction is about 100 and 95 days in 2007 and 2008, respectively. We also identify factors associated with P/C insurers’ short-term equity trading behavior. Logistic regressions show that financial variables are more strongly tied to insurers’ short-term equity trading behavior than underwriting and demographic variables.
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| format | Article |
| id | doaj-art-ee0f93e1051440d4a73d3dd4a483fe57 |
| institution | Kabale University |
| issn | 1512-8962 2303-680X |
| language | English |
| publishDate | 2013-11-01 |
| publisher | Faculty of Economics, University of Tuzla |
| record_format | Article |
| series | Economic Review |
| spelling | doaj-art-ee0f93e1051440d4a73d3dd4a483fe572025-02-10T00:31:24ZengFaculty of Economics, University of TuzlaEconomic Review1512-89622303-680X2013-11-01112SHORT-TERM EQUITY TRADING PRACTICES OF INSTITUTIONAL INVESTORS: EVIDENCE FROM PROPERTY-CASUALTY INSURERS IN THE UNITED STATESJin Park0Tim Query1 Indiana State University, Scott College of Business, Analytical Department New Mexico State University, Finance Department In addition to premiums, investment income is one of the two main sources of capital for property-casualty (P/C) insurance companies. This study investigates short-term equity trading behavior of P/C insurers in the United States in 2007 and 2008, and finds that over 27 percent of non-group affiliated insurers engage in short-term equity trading activity. When it comes to the medium of short-term equity trading, stocks categorized as Industrial and Miscellaneous Stocks are the most frequently utilized with Financial Institutions’ stocks a distant second. This is due to a larger number of stocks falling under these two categories. However, in terms of the mean size of transactions, the average investment in preferred stock ranges from four to five times larger than that of common stocks during the period of interest in this study. The mean holding period for short-term common equity transaction is about 100 and 95 days in 2007 and 2008, respectively. We also identify factors associated with P/C insurers’ short-term equity trading behavior. Logistic regressions show that financial variables are more strongly tied to insurers’ short-term equity trading behavior than underwriting and demographic variables. http://er.ef.untz.ba/index.php/er/article/view/152institutional investorsproperty-casualty insurersinvestment decisions |
| spellingShingle | Jin Park Tim Query SHORT-TERM EQUITY TRADING PRACTICES OF INSTITUTIONAL INVESTORS: EVIDENCE FROM PROPERTY-CASUALTY INSURERS IN THE UNITED STATES Economic Review institutional investors property-casualty insurers investment decisions |
| title | SHORT-TERM EQUITY TRADING PRACTICES OF INSTITUTIONAL INVESTORS: EVIDENCE FROM PROPERTY-CASUALTY INSURERS IN THE UNITED STATES |
| title_full | SHORT-TERM EQUITY TRADING PRACTICES OF INSTITUTIONAL INVESTORS: EVIDENCE FROM PROPERTY-CASUALTY INSURERS IN THE UNITED STATES |
| title_fullStr | SHORT-TERM EQUITY TRADING PRACTICES OF INSTITUTIONAL INVESTORS: EVIDENCE FROM PROPERTY-CASUALTY INSURERS IN THE UNITED STATES |
| title_full_unstemmed | SHORT-TERM EQUITY TRADING PRACTICES OF INSTITUTIONAL INVESTORS: EVIDENCE FROM PROPERTY-CASUALTY INSURERS IN THE UNITED STATES |
| title_short | SHORT-TERM EQUITY TRADING PRACTICES OF INSTITUTIONAL INVESTORS: EVIDENCE FROM PROPERTY-CASUALTY INSURERS IN THE UNITED STATES |
| title_sort | short term equity trading practices of institutional investors evidence from property casualty insurers in the united states |
| topic | institutional investors property-casualty insurers investment decisions |
| url | http://er.ef.untz.ba/index.php/er/article/view/152 |
| work_keys_str_mv | AT jinpark shorttermequitytradingpracticesofinstitutionalinvestorsevidencefrompropertycasualtyinsurersintheunitedstates AT timquery shorttermequitytradingpracticesofinstitutionalinvestorsevidencefrompropertycasualtyinsurersintheunitedstates |