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Issuance Decisions and Strategic Focus: The Case of Long‐Term Care Insurance
Author(s) -
McShane Michael K.,
Cox Larry A.
Publication year - 2009
Publication title -
journal of risk and insurance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.055
H-Index - 63
eISSN - 1539-6975
pISSN - 0022-4367
DOI - 10.1111/j.1539-6975.2009.01289.x
Subject(s) - business , diversification (marketing strategy) , finance , term (time) , line of business , focus (optics) , actuarial science , marketing , business model , physics , quantum mechanics , business relationship management , electronic business , optics
Increasing costs of long‐term care are placing ever greater burdens on state and federal budgets, yet private long‐term care insurance remains a relatively minor financing vehicle. Although many researchers provide rationales for the limited private market, some life–health insurers have forged ahead into this relatively new and risky line of business. We investigate what makes these insurers different and whether managers are following a diversification or strategic focus strategy. We find that strategic focus is a consistently important factor and that managers' participation and volume decisions are made independently.