The Impact of CEO Turnover on Property–Liability Insurer Performance

The Impact of CEO Turnover on Property–Liability Insurer Performance

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Article ID: iaor201112133
Volume: 78
Issue: 3
Start Page Number: 583
End Page Number: 608
Publication Date: Sep 2011
Journal: Journal of Risk and Insurance
Authors: , ,
Keywords: insurance
Abstract:

Chief executive officer (CEO) turnover has long been an important topic in the academic literature. Previous research has focused mostly on the rationale for CEO turnovers, or circumstances that lead to CEO changes, with much less attention paid to how CEO turnovers affect future firm performance. We extend the literature regarding the impact of CEO turnover on performance using data for U.S. property‐liability insurers. Measuring firm performance with cost efficiency (CE) and revenue efficiency (RE) scores, we find strong support for the hypothesis that firms with a CEO turnover, especially those with a nonroutine turnover, experience more favorable performance changes than firms without a CEO turnover.

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