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The determinants of investment returns in the fire insurance industry: the case of Sweden, 1903–1939

Published online by Cambridge University Press:  15 January 2013

Lars Fredrik Andersson ,
Magnus Lindmark ,
Mike Adams  and
Vineet Upreti
Lars Fredrik Andersson
Affiliation:
Department of Economic History, Umeå University, larsfredrik.andersson@ekhist.umu.se
Magnus Lindmark
Affiliation:
Department of Economic History, Umeå University, magnus.lindmark@ekhist.umu.se
Mike Adams
Affiliation:
School of Management, University of Bath, M-B.Adams@bath.ac.uk
Vineet Upreti
Affiliation:
School of Management, University of Bath, V.Upreti@bath.ac.uk
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Abstract

We employ a panel data research design to examine the determinants of investment returns in the Swedish property fire insurance industry from 1903 to 1939 – a period of great economic and political uncertainty. Contrary to expectations, we find that mutual fire insurers generated systematically higher investment returns than stock fire insurers. Investment returns are inversely related to leverage but positively related to liquidity, showing that firms adopting a more precautionary investment strategy attain higher returns.

Keywords

investmentportfolio managementfire insuranceSweden

JEL classification

N24: Europe: 1913– G22: Insurance • Insurance Companies • Actuarial Studies N84: Europe: 1913–
Type
Articles
Information
Financial History Review , Volume 20 , Issue 1 , April 2013 , pp. 73 - 89
Copyright
Copyright © European Association for Banking and Financial History e.V. 2013

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