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Surviving the storm: Evaluating the role of enterprise risk management in property and liability insurers' performance during the COVID-19 pandemic

Author

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  • Fung, Derrick W.H.
  • Lee, Wing Yan
  • Yang, Charles C.

Abstract

This study examines whether the implementation of a mature enterprise risk management (ERM) framework by property and liability insurers improved their resilience in the face of the COVID-19 pandemic. To address the potential problem of endogeneity, we analyze a panel dataset of listed property and liability insurers from around the world using the propensity score matching method. Subsequently, a two-step “doubly robust” estimation method is employed. The results reveal that the performance of insurers with less mature ERM frameworks was adversely affected by the pandemic but that of insurers with more mature ERM frameworks was not. These findings remain consistent after conducting various robustness checks. Separate consideration of each ERM component reveals that no component independently enhanced insurers' resilience; rather, the components collectively enhanced their resilience. Overall, this study provides valuable insights for insurers and regulators aiming to enhance the industry's ability to withstand future challenges.

Suggested Citation

  • Fung, Derrick W.H. & Lee, Wing Yan & Yang, Charles C., 2025. "Surviving the storm: Evaluating the role of enterprise risk management in property and liability insurers' performance during the COVID-19 pandemic," Journal of Corporate Finance, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:corfin:v:91:y:2025:i:c:s0929119925000197
    DOI: 10.1016/j.jcorpfin.2025.102751
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    More about this item

    Keywords

    Enterprise risk management; Resilience; COVID-19; Public insurers;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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