The use of client-engaged specialists to support opportunistic estimates: evidence from the insurance industry

• 成果类型: Article; Early Access
• 署名作者: Ege, Matthew S.; Imdieke, Andrew J.; Stuber, Sarah B.
• 署名单位: Texas A&M University System; Texas A&M University College Station; Mays Business School; University of Notre Dame
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-025-09910-7
• 发表日期: 2025
• 关键词: fair value measurements; earnings management; loss reserves; audits; association; expertise; Oversight; services; errors

摘要

We use unique disclosures in the insurance industry to examine whether client-engaged specialists (i.e., external actuaries) affect opportunism within the claim loss reserve. Using a fixed-effects approach, we find that external actuaries significantly affect the opportunism in the claim loss reserve, approaching half the effect of the auditor. With respect to actuary characteristics, we find a positive (negative) association between actuary permissiveness (actuary size) and opportunism in the claim loss reserve. In additional analyses, we find that the relation between actuary permissiveness and claim loss reserve opportunism is stronger when insurers have incentives to opportunistically manage the claim loss reserve. This relation continues to persist in the presence of high-quality auditors. Overall, we provide evidence suggesting that client-engaged external actuaries can be used to support opportunistic claim loss reserve estimates.