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- Title
Life Insurers in the Public and Private Security Markets.
- Authors
Cabanilla, Nathaniel B.
- Abstract
An analysis of determinants of life insurer behavior in the market for publicly issued securities indicates that purchases of securities in this market are partly responsive to unexpected cash flow. Acquisitions in the private market (through the forward commitment process), however, are partly dependent on expected cash flow. It is suggested that the growth of life insurer participation in the market for publicly issued securities may be related to the rise in the volatility of financial markets which has increasingly engendered greater demand for liquidity. In turn, this rise curbed the willingness of life insurers to forward commit, evidenced not only by the decline in amounts committed, but by the lengthening of the lag between changes in expected cash flow and new commitments.
- Subjects
INSURANCE companies; LIFE insurance; FINANCIAL markets; INSURANCE; CASH management; GOVERNMENT securities; SECURITIES; INSURANCE stocks; SECURITIES trading
- Publication
Journal of Risk & Insurance, 1987, Vol 54, Issue 2, p348
- ISSN
0022-4367
- Publication type
Article
- DOI
10.2307/252864