The impact of regulator's statement requesting EU insurers to suspend dividend distributions due to the COVID-19 pandemic on share prices
DOI:
https://doi.org/10.3326/pse.46.1.3Keywords:
COVID-19, regulator's statement, insurance companies, event study, share pricesAbstract
This article examines the impact of the regulator’s statement requesting EU insurers to suspend dividend distributions due to the COVID-19 pandemic on share prices of insurance companies. The purpose of the regulation was to maintain a high level of capitalisation of insurance companies, thus allowing them to pay compensation for any damage incurred during the crisis. The statistical significance of the potential negative impact was explored using event study methodology. The empirical results suggest that the negative impact following the statement’s release is not statistically significant over the chosen event window. The robustness of the results is confirmed by several statistical tests – parametric and nonparametric. The measure did not result in a fall in share prices in line with economic theory but, rather, contributed to ensuring the financial stability of the European insurance sector, supporting the real economy and consequently allowing quicker economic recovery.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Enja Erker
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Copyright Notice
Public Sector Economics (PSE) is a an Open Access Journal licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, which permits use and redistribution (commercial and non-commercial), as long as the licensed work is passed along unchanged and in whole, with credit to PSE as original publisher.
Authors retain the copyright on the papers published in PSE but grant the right of first publication to the journal.
Papers published in PSE can be re-published only exceptionally and in unaltered form, e.g., as a chapter in a volume of an author’s collected papers, or as an unabridged translation for educational purposes. The author(s) must obtain written permission of the publisher and clearly indicate in a first page footnote the reference to the original publication in PSE.
Individual users may access, download, copy and display the papers published in PSE, provided that the authors’ intellectual and moral rights, reputation and integrity are not compromised. It is the obligation of the user to ensure that any reuse complies with the copyright policies of the owners.
If the content of papers published in the PSE is copied, downloaded or otherwise reused for non-commercial research and educational purposes, a link to the appropriate bibliographic citation (authors, title of the paper, PSE volume, year and page numbers) should be provided. Copyright notices and disclaimers must not be deleted.