Purpose

This paper aims to investigate the impact of risk disclosure practices (voluntary, mandatory and risk disclosure index) on stock return volatility, market liquidity and financial performance for insurance companies in the UK and Canada, before and after the International Financial Reporting Standards (IFRS) adoption.

Design/methodology/approach

The panel data analysis covers 14 insurance companies in the UK and 12 in Canada over a six-year period, three years before and three years after the implementation of IFRS. The authors collected risk disclosure data manually from the annual reports and analyzed it through QSR NVivo software for each country. The other variables are secondary data collected from Thomson Reuters Eikon and Datastream.

Findings

The results reveal that mandatory risk disclosure practices positively influence stock return volatility for UK insurers but not Canadian ones. Moreover, both mandatory and voluntary risk disclosures increase market liquidity for UK insurers. The outcomes also show a negative influence of risk disclosure practices on financial performance for both the UK and Canadian insurers. The adoption of IFRS enhances the impact of risk disclosure practices in both countries on market liquidity and financial performance.

Research limitations/implications

The findings rationalize the impact of risk disclosure practices on volatility, liquidity and financial performance of UK and Canada insurers, and the effect of IFRS in triggering those results.

Practical implications

The findings highlight the diverse effects of voluntary and mandatory risk disclosure practices in enhancing market discipline and mitigating information asymmetry problems to investors. Regulators and policymakers could rely on the findings to amend and develop disclosure standards more frequently to assure their effectiveness. The authors also offer insights to managers to determine the levels of mandatory and voluntary disclosure practices and disclosure strategies to gain their stakeholders’ confidence.

Originality/value

This study contributes to the literature of risk disclosure in the insurance industry for both the UK and Canada where scarce studies are conducted. It also offers interesting implementations to investors, managers and policymakers.

中文翻译：

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风险披露对英国和加拿大保险公司的波动性、流动性和业绩的影响

目的

本文旨在调查风险披露实践（自愿、强制和风险披露指数）对英国和加拿大保险公司在国际财务报告准则 (IFRS) 实施前后的股票收益波动性、市场流动性和财务业绩的影响采用。

设计/方法/途径

面板数据分析涵盖了英国的 14 家保险公司和加拿大的 12 家保险公司，涵盖了 IFRS 实施前三年和实施后三年的六年时间。作者从年度报告中手动收集风险披露数据，并通过 QSR NVivo 软件针对每个国家进行分析。其他变量是从 Thomson Reuters Eikon 和 Datastream 收集的二手数据。

发现

结果表明，强制性风险披露做法对英国保险公司而非加拿大保险公司的股票收益波动产生积极影响。此外，强制性和自愿性风险披露都增加了英国保险公司的市场流动性。结果还表明，风险披露做法对英国和加拿大保险公司的财务业绩有负面影响。IFRS 的采用增强了两国风险披露实践对市场流动性和财务业绩的影响。

研究局限性/影响

调查结果合理化了风险披露做法对英国和加拿大保险公司的波动性、流动性和财务业绩的影响，以及 IFRS 在触发这些结果方面的影响。

实际影响

调查结果强调了自愿和强制风险披露做法在加强市场纪律和减轻投资者信息不对称问题方面的不同影响。监管机构和政策制定者可以根据调查结果更频繁地修改和制定披露标准，以确保其有效性。作者还为管理者提供了见解，以确定强制和自愿披露做法的水平以及披露策略，以获得利益相关者的信心。

原创性/价值

这项研究为英国和加拿大的保险业风险披露文献做出了贡献，这两个国家的研究很少。它还为投资者、经理和政策制定者提供了有趣的实施。