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Impact of geopolitical risk on corporate insurance investment

Author

Listed:
  • Zhou, Qiao
  • Zhang, Lin
  • Huang, Hui

Abstract

This study examines the impact of geopolitical risk on Chinese firms’ corporate insurance investment. We find that an increase in geopolitical risk considerably increases enterprises willingness to purchase property insurance. Specific analysis indicates that an increase in geopolitical risk also leads to an increase in premium expenditure for enterprises that have purchased insurance. Mechanism analysis suggests that geopolitical risk indirectly drives enterprises to increase insurance coverage by increasing the volatility of their import and export activities. Moreover, compared to nonstate-owned enterprises, state-owned enterprises tend to increase insurance coverage when facing geopolitical risks.

Suggested Citation

  • Zhou, Qiao & Zhang, Lin & Huang, Hui, 2025. "Impact of geopolitical risk on corporate insurance investment," Finance Research Letters, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016969
    DOI: 10.1016/j.frl.2024.106667
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    References listed on IDEAS

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    More about this item

    Keywords

    Geopolitical risk; Insurance; Decision-making; Import and export; Chinese industrial enterprise;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • 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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