The relative performance of mutual and proprietary life insurance companies in the UK: an exploratory study

This source preferred by Steve Letza

Authors: Hardwick, P. and Letza, S.

http://eprints.bournemouth.ac.uk/3073/

http://ibal.bmth.ac.uk/pdf_docs/292.pdf

Publisher: Bournemouth University School of Finance and Law

Place of Publication: Poole, UK

After discussing the main tenets of stakeholder and agency theory, the paper provides an exploratory empirical study of the relative performance of mutual and proprietary life insurance companies in the UK during the period 1995-96. The mutual companies included in the sample performed well relative to the proprietary companies in terms of their overall financial strength, annual surpluses and investment earnings. While the mutuals had slightly higher expense ratios than the proprietary companies, they were relatively more cost efficient and operated with potential economies of scale. There is also evidence that fund managers in mutuals perform at least as well on average as those in proprietary companies.

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