Universität zu Köln

Schuh, Frederick (2024). Essays on the Impact of Natural Disasters on Insurance Stock Value and the Performance of Mutual Insurance in Germany. PhD thesis, Universität zu Köln.

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Abstract

This dissertation examines how natural disasters and ownership structures (stock vs. mutual insurers) impact financial stability, risk management, and performance in the insurance industry. The first essay analyzes the effects of major hurricanes on U.S. property-casualty insurers' stock performance. While severe hurricanes lead to moderate short-term negative returns, the market responds efficiently, with some smaller events even driving positive returns due to demand effects. The second essay explores the influence of ownership structures on the risk behavior of German non-life insurers. Stock insurers take on greater risks in underwriting and investments, while mutual insurers focus on stability and lower risk, reflecting their member-oriented governance. The third essay highlights that mutual insurers outperform stock insurers in growth, expenses, and solvency but are underappreciated by customers, who lack awareness of their unique benefits. Improved communication could enhance their market position. The fourth essay shows that mutual insurers provide higher-quality financial reporting, with less manipulation and more accurate reserves, due to reduced agency conflicts. Overall, the dissertation reveals how disasters and ownership forms shape insurers’ strategies, offering regulatory and strategic insights.