Local religious beliefs and insurance companies' risk-taking behaviour.

ABSTRACT: We empirically examine the effect of local religious beliefs on the risk-taking behaviour of U.S. life insurers headquartered in that region. We distinguish between insurers that predominantly write annuities and insurers that predominantly write life insurance policies; the annuity business is relatively riskier than writing life insurance. Insurers headquartered in high-Catholic or low-Protestant areas are more likely to be annuity writers. Annuity writers located in high-Catholic or low-Protestant areas invest more in risky assets and exhibit higher investment return volatilities, as well as a higher volatility of their return on assets. Overall, our results suggest that local culture has significant influences on life insurers' behaviour.

Supplementary information

The online version contains supplementary material available at 10.1057/s41288-021-00211-z.

SUBMITTER: Berry-Stolzle TR 

PROVIDER: S-EPMC8022316 | biostudies-literature |

REPOSITORIES: biostudies-literature