The Impact of Insurer Name Changes on The Demand for Insurance

Abstract

AbstractCorporate name changes are relatively common events, with some evidence suggesting that name changes are strategic in nature. Although prior research has examined the effect of name changes on the firm, these studies have focused primarily on the stock price reaction to name changes. Such a focus has a number of limitations, including a reliance on samples that consist solely of publicly traded firms and an inability to determine whether the source of the impact is driven by increases in revenue, increases in efficiency, and/or reductions in costs. We overcome these limitations by testing the impact of corporate name changes on U.S. property–casualty insurers using detailed statutory data. We find a significant and positive relation between name changes and subsequent growth in premiums. The results are robust across various model specifications and suggest that name changes contain information that consumers interpret as meaningfully positive.