1. Explaining the Relationship Between Firm Performance and Corporate Governance of Dutch Non-Life Insurance Companies: Dutch Mutual and Commercial Insurance Companies Compared

Comparing the performance of mutual and commercial insurance companies in the Netherlands between 2008 and 2012, this paper gives insight in the relationship between performance and corporate governance. We specifically focused on ownership in relationship with diversification, scale, board and ambidexterity.

Current findings in the literature are ambiguous. We found that there is room for mutuals to coexist next to stock listed insurers. Stock listed companies do not outperform mutuals and even have a significantly worse combined ratio and a tendency for higher acquisition cost. Surprisingly stock listed insurers do not have lower cost ratios despite assumed shareholder push.

We found evidence for economies of scale within the area of acquisition cost but not in the company cost area. Board composition testing unveiled that larger boards help reducing brokerage and more diversified boards have lower company costs in certain occasions. Ambidexterity is via a novel approach measured through risk tolerance and board diversification. There is a tendency that insurers have less premium growth when boards are more diverse. Additional research in this area is needed while only one proxy is taken into account. The sample covers 125 observations in the Dutch non-life insurance market between 2008 and 2012. The insights are of great relevance for a sector in the middle of a rapid reform where questions regarding consolidation reign supreme.