Centro de Documentacion de Fundación MAPFRE - Directors' and officers' liability insurance and firm value

MAP20180020094

Directors' and officers' liability insurance and firm value / Joon Ho Hwang, Byungmo Kim

Sumario: This study examines the effect of directors' and officers' liability (D&O) insurance on firm value. Previous studies are divided on the value implication of D&O insurance: some argue for various benefits of being covered by D&O insurance, whereas others focus on the managerial opportunism stemming from being insured. In order to address whether D&O insurance increases firm value, we utilize a sample of quoted Korean companies from a period in which the disclosure of D&O insurance information was mandatory and there was a significant cross-sectional variation in the firms' coverage of D&O insurance. We find that controlling for the endogeneity of D&O insurance coverage, D&O insurance increases firm value compared to noninsured firms. We also find evidence that the increase in firm value is pronounced for firms with greater growth opportunities, which suggests that D&O insurance can help firms to better convert growth opportunities into higher firm value

En: The Journal of risk and insurance. - Nueva York : The American Risk and Insurance Association, 1964- = ISSN 0022-4367. - 01/06/2018 Volumen 85 Número 2 - junio 2018 , p. 447-482

1. Seguro D&O . 2. Seguro de responsabilidad civil patronal . 3. Responsabilidad de los administradores . 4. Valoración de empresas . 5. Creación de valor en la empresa . I. Kim, Byungmo . II. Title.