Property-Liability Insurance Company Market Pullout Announcements and Shareholder Wealth

This study presents an analysis of the wealth effects of property-liability insurance company market pullout announcements on the shareholders of both the withdrawing firms and their major competitors. The results of the study indicate that market withdrawals are positively interpreted by financial market participants, as the share prices of the withdrawing companies experience statistically significant risk-adjusted mean price increases of about one percent. On average, there is little evidence that market withdrawals adversely affect major competitors of the withdrawing insurance companies