Risk management and the cost of equity: evidence from the United Kingdom’s non-life insurance market
利用英国非寿险行业的面板数据，研究再保险（风险管理）对股权成本的影响，发现再保险降低股权成本但呈非线性关系，且受财务困境风险调节。
We investigate the effect of risk management (reinsurance) on the corporate cost of equity using panel data drawn from the United Kingdom’s (UK) non-life insurance industry. Our results show that use of reinsurance lowers the cost of equity but that the relation is non-linear. We find that the rate of reduction declines as the level of premiums ceded relative to total gross premiums written increases. We also find that the reinsurance-cost of equity relation is moderated by the risk of financial distress/bankruptcy. This moderating relation is robust to the use of three alternative measures of financial distress and bankruptcy risk.