Document Type

Occasional Paper

Publication Date

Fall 11-2006


The regulatory and competitive environment in the life insurance industry has changed dramatically in recent years. We investigate the effectiveness of demutualization as a strategic response to the challenges posed by these sweeping changes. The study finds that the demutualized firms generally have implemented a successful strategy based on higher growth, greater profitability, cost effectiveness and shifts in product mix. Also, we find that management takes greater risk in the investment portfolio. In addition, demutualization unlocks value lying dormant in the mutuals’ surplus. The paper concludes that the demutualized firms have generated substantial excess returns over the several market indexes, creating significant economic value.


College of Management at University of Massachusetts Boston, Financial Services Forum, Working Paper 1014.

Published in Review of Business, Winter 2006, Vol. 27, Number 1, pp. 10-17.

Included in

Business Commons


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