A note on geographical diversification and performance of the world's largest reinsurance groups
Notice bibliographique
Résumé
Purpose This paper aims to examine the relationship between geographical diversification and the underwriting performance for the world's largest reinsurance groups. It also aims to verify that the form and nature of the relationship between diversification and performance follow an S‐shaped curve with increased diversification of the largest reinsurance groups. Design/methodology/approach Analysis in the paper is based on the concept of Geographical Spread Index defined and calculated by UNCTAD. Data on largest reinsurance groups in the world are published annually by Standard & Poor's for only a limited number of reinsurance groups. To overcome the small sample problem, a re‐sampling procedure from the original sample, similar to a bootstrap sample, is used to validate the results. Findings The results show that, overall, international geographical diversification has a positive effect on a reinsurance firm's underwriting performance but that this relationship is not linear. It rather follows an S‐shaped curve. Although data limitation does not allow more sophisticated investigations, the results reported in this paper are nevertheless significant. It seems that at an early stage of expansion in proximate markets there are efficiency gains for the firm. With increased internationalization there may be a diminution in performance because of higher transaction costs or learning costs for new markets. Further expansion in foreign markets brings back efficiency and higher performance. Research limitations/implications Only cross‐section data for a small sample of companies are available and therefore it is not possible to analyze the dynamics of geographical diversification. A firm may deliberately expand for long‐term strategy reasons such as market share even though this is detrimental to medium‐run performance. Also, the analysis cannot provide any answer to the existence or not of a maximum level of international diversification beyond which performance would decline. Originality/value In the literature on firm diversification in the financial services sector, product diversification and performance has received significant attention with mixed results but except for a few papers, the internationalization aspect has not been examined. The reinsurance sector is important since reinsurance activities are, by nature, more geographically diversified than other financial activities. Furthermore, the largest European reinsurance groups dominate this worldwide market and many reinsurance companies have, in the past decade, increased their foreign direct investment and acquired other companies in part because of the belief that only very large players will have the cost advantages necessary to remain competitive in global markets.
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Prédiction distillée sur la base complète
Imitation des enseignantsNi prévalence calibrée, ni vérité terrain. Validation humaine à venir. Apprise à partir de 10 348 étiquettes directes de Codex et de 10 348 étiquettes directes de Gemma. Le mode candidate est l'union des têtes enseignantes seuillées; le consensus est leur intersection. Ces sorties portent le statut machine_predicted_unvalidated et ne sont ni des étiquettes humaines ni des étiquettes directes de modèles de pointe.
Scores Codex et Gemma par catégorie
| Catégorie | Codex | Gemma |
|---|---|---|
| Métarecherche | 0,000 | 0,000 |
| Méta-épidémiologie (sens strict) | 0,000 | 0,000 |
| Méta-épidémiologie (sens large) | 0,000 | 0,000 |
| Bibliométrie | 0,000 | 0,001 |
| Études des sciences et des technologies | 0,000 | 0,000 |
| Communication savante | 0,000 | 0,001 |
| Science ouverte | 0,000 | 0,000 |
| Intégrité de la recherche | 0,000 | 0,000 |
| Charge utile insuffisante (le modèle a refusé de juger) | 0,000 | 0,000 |
Scores machine (provisoires)
Les deux têtes enseignantes du modèle étudiant, lues sur ce travail. Un score ordonne la base pour la relecture; il n'affirme jamais une catégorie, et le statut de validation accompagne chaque rangée tel quel.
Scores de référence d'un modèle non mature (critères de maturité non atteints, 7 itérations). Un score ordonne; il n'affirme jamais une catégorie.
score_only:v0-immature-baseline · tel quel depuis la passe de notation : score_only signifie que le nombre peut ordonner les travaux, et qu'aucune étiquette de catégorie n'en découleClassification
machine, non validéePrédiction automatique; un appel candidat d’une seule tête enseignante, pas un consensus.
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