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Insurance Companies’ Responses to Climate Change: Adaptation, Dynamic Capabilities and Competitive Advantage

Author

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  • Kristin Stechemesser

    (Chair of Environmental Management and Accounting, Faculty of Business and Economics, Technische Universit&aauml;t Dresden, Münchner Platz 1/3, Dresden 01062, Germany.)

  • Jan Endrikat

    (Chair of Management Accounting/Controlling, Technische Universit&aauml;t Dresden, Dresden, Germany.)

  • Nico Grasshoff

    (Chair of Environmental Management and Accounting, Faculty of Business and Economics, Technische Universit&aauml;t Dresden, Münchner Platz 1/3, Dresden 01062, Germany.)

  • Edeltraud Guenther

    (Chair of Environmental Management and Accounting, Faculty of Business and Economics, Technische Universit&aauml;t Dresden, Münchner Platz 1/3, Dresden 01062, Germany.)

Abstract

Drawing on the dynamic capability view, we analyse how insurers adapt to climate change impacts and how adaptation relates to corporate financial performance. Based on a comprehensive literature review, we deduce seven categories of adaptation measures associated with three dynamic capability dimensions of climate change adaptation (i.e. climate knowledge absorption, climate-related operational flexibility and strategic climate integration). Using this framework, we conduct a content analysis of insurers’ adaptation efforts as reported to the Carbon Disclosure Project. Regression analysis reveals positive relationships between climate knowledge absorption and return on assets (ROA), climate-related operational flexibility and ROA, and between the total number of adaptation measures and ROA.

Suggested Citation

  • Kristin Stechemesser & Jan Endrikat & Nico Grasshoff & Edeltraud Guenther, 2015. "Insurance Companies’ Responses to Climate Change: Adaptation, Dynamic Capabilities and Competitive Advantage," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 40(4), pages 557-584, October.
    • Handle: RePEc:pal:gpprii:v:40:y:2015:i:4:p:557-584
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    Citations

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    Cited by:

    1. Liu, Bing & Yin, Weijun & Chen, Gang & Yao, Jing, 2023. "The threshold effect of climate risk and the non-linear role of climate policy uncertainty on insurance demand: Evidence from OECD countries," Finance Research Letters, Elsevier, vol. 55(PA).
    2. Di Tommaso, Caterina & Mazzuca, Maria, 2023. "The stock price of European insurance companies: What is the role of ESG factors?," Finance Research Letters, Elsevier, vol. 56(C).
    3. Nadine Gatzert & Philipp Reichel, 2022. "Awareness of climate risks and opportunities: empirical evidence on determinants and value from the U.S. and European insurance industry," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(1), pages 5-26, January.
    4. Tiberio Daddi & Niccolò Maria Todaro & Maria Rosa De Giacomo & Marco Frey, 2018. "A Systematic Review of the Use of Organization and Management Theories in Climate Change Studies," Business Strategy and the Environment, Wiley Blackwell, vol. 27(4), pages 456-474, May.
    5. Ulrike Meinel & Karl-Michael Höferl, 2017. "Non-Adaptive Behavior in the Face of Climate Change: First Insights from a Behavioral Perspective Based on a Case Study among Firm Managers in Alpine Austria," Sustainability, MDPI, vol. 9(7), pages 1-18, June.
    6. Anne Bergmann, 2016. "The Link between Corporate Environmental and Corporate Financial Performance—Viewpoints from Practice and Research," Sustainability, MDPI, vol. 8(12), pages 1-15, November.

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