Demutualisation, initial public offerings and long-run market performance of Canadian life insurance companies. (1st January 2013)

• Record Type: Journal Article
• Authors: Aintablian, Sebouh
• Is Part Of: International journal of financial services management. Volume 6:Number 3(2013)
• Page Start: 200
• Page End: 218
• Publication Date: 2013-01-01
• Subjects: demutualisation -- initial public offering -- life insurance companies -- Canada; Financial services industry -- Management -- Periodicals; 332.1068
• Languages: English
• ISSNs: 1460-6712

Abstract

We examine alternative hypotheses for the demutualisation of a sample of Canadian life insurance companies (1999–2000) as well as short-run and long-run market effects of demutualisation on firm performance. Our results indicate that the Canadian insurance companies became more efficient after converting to publicly traded stock companies and that wealth expropriation was not the primary motive behind demutualisation. We also find that the stocks of the demutualised companies out-performed the market during the three year period after going public.