I am interested in examining whether there is an earning management in insurance industry and whether more transparency in financial reporting would have any relation with such behavior. Thanks
Yes, if you are able to calculate the IRR of any such insurance company then you would be able to see the earing management of that company.
Earnings management could take a few forms in an insurance context: recognition of too much (or too little) premium income as earnings, under-provisioning for future losses would be two that come to mind. Over time management tend to get caught out when reality exposes such accounting games. So I would suggest a time-series based analysis around provisioning. The problem there is that you would need to factor in survivorship bias to account for the insurance companies that went bust along the way.
Look at CY results and the component due to prior year development (PYD). Under the theory results are managed to smooth CY income, you would expect to see PYD being declared to have a counter-cyclical tempering effect. Also check articles such as The Impact of the Insurance Economic Cycle on Insurance Pricing by J Boor.