Reinsurance, Capital Structure and Profitability: Evidence from the Lloyd’s Market

Abstract

本研究探討勞依茲辛迪卡之再保險、財務槓桿與獲利性之間的關係。我們利用2004－2009年辛迪卡的資料及聯立方程式模型，發現：（1）使用比較多再保險的辛迪卡，獲利比較差；而獲利比較好的辛迪卡，再保險的使用比較少；（2）高槓桿的辛迪卡，通常獲利性比較差；而獲利比較好的辛迪卡，通常槓桿比較低；（3）再保險比較高的辛迪卡，槓桿比較高，但反之不成立。我們的結果支持融資順位理論、風險承擔假說與預期破產成本假說。

This study examines the relations among Lloyd`s syndicates` reinsurance, leverage and profitability. A simultaneous equations model is adopted, using data on syndicates for the period 2004-2009. We find some two-way relations among these variables. First, syndicates with higher reinsurance have worse profitability and those with better profitabilityrely less on reinsurance. Second, highly leveraged syndicates are generally less profitable and profitable syndicates are less leveraged. In regards to the relation between reinsurance and leverage, we find that reinsurance positively affects leverage; a reverse causality is not supported by our data. Our findings are consistent with ＂pecking order theory＂, the ＂riskbearing hypothesis＂, and the ＂expected bankruptcy cost hypothesis＂.