scholarly journals Awareness of climate risks and opportunities: empirical evidence on determinants and value from the U.S. and European insurance industry

2021 ◽  
Author(s):  
Nadine Gatzert ◽  
Philipp Reichel
Keyword(s):  
Climate Change ◽  
Fixed Effects ◽  
Insurance Industry ◽  
Insurance Companies ◽  
Fixed Effects Model ◽  
Climate Risks ◽  
European Insurance ◽  
Value Effect ◽  
Reporting Data ◽  
The U.S

AbstractIn this paper, we study the awareness of European and U.S. insurance companies of climate-related risks and opportunities using a respective indicator from the Refinitiv Eikon database that uses reporting data. Based on this, we examine the determinants and value of the awareness of business risks and opportunities resulting from climate change, which, to the best of our knowledge, has not been done so far, despite its increasing and specific relevance for the insurance industry. We use a logistic regression analysis as well as a linear fixed effects model for a 10-year period from 2009 to 2018. Our results show that larger European insurers are significantly more likely to exhibit such awareness. When controlling for subsectors, property & casualty insurers tend to be aware of the risks and opportunities resulting from climate change. Moreover, when using the linear fixed effects model, we find a statistically significant positive value effect on Tobin’s Q.

scholarly journals Are the Self-Employed Mentally Healthier Than Salaried Workers? Evidence From Korea, Mexico, and the United States

2020 ◽  
Vol 4 (Supplement_1) ◽  
pp. 40-41
Author(s):  
Hankyung Jun
Keyword(s):  
Fixed Effects ◽  
Mental Health Problems ◽  
Unobserved Heterogeneity ◽  
The United States ◽  
Fixed Effects Model ◽  
Reverse Causality ◽  
Positive Health ◽  
Self Employment ◽  
Salaried Workers ◽  
The U.S

Abstract Self-employed workers are often reported to have better health than salaried workers. Whether this is because self-employment has health benefits or healthier workers are self-employed is not clear. Self-employed workers may have higher job satisfaction due to higher levels of self-efficacy and autonomy, but may also experience higher job stress, uncertainty, and lack of health insurance leading to mental health problems. Self-employed workers in the U.S. may have different characteristics than those in Mexico and Korea given different working and living environments as well as different institutional arrangements. This study will examine the association between self-employment and mental and cognitive health for older adults in the U.S., Mexico, and South Korea. It uses harmonized panel data from the Health and Retirement Study, the Korean Longitudinal Study of Aging, and the Mexican Health and Aging Study. We compare the health and selection effect of self-employment using a pooled logistic model, fixed-effects model, and a bivariate probit model. In addition to comparing self-employed and salaried workers, we analyze differences between self-employed with and without employees. By using rich data and various models, we address reverse causality and estimate the relationship between self-employment and health. We show that the positive health effects of self-employed workers in the U.S. disappear once controlled for unobserved heterogeneity, indicating the possibility of healthier workers selecting into self-employment. Interestingly, for Korea and Mexico, healthier individuals seem to select into wage work which reflects the difference in working conditions across countries. Further analysis will show effects by business size.

scholarly journals Regulatory Forbearance in the U.S. Insurance Industry: The Effects of Removing Capital Requirements for an Asset Class

2021 ◽  
Author(s):  
Bo Becker ◽  
Marcus M Opp ◽  
Farzad Saidi
Keyword(s):  
Insurance Industry ◽  
Capital Requirements ◽  
Insurance Companies ◽  
High Yield ◽  
Capital Regulation ◽  
Fixed Income ◽  
Portfolio Holdings ◽  
Asset Class ◽  
Regulatory Forbearance ◽  
The U.S

Abstract We analyze the effects of a reform of capital regulation for U.S. insurance companies in 2009. The reform eliminates capital buffers against unexpected losses associated with portfolio holdings of MBS, but not for other fixed-income assets. After the reform, insurance companies are much more likely to retain downgraded MBS compared to other downgraded assets. This pattern is more pronounced for financially constrained insurers. Exploiting discontinuities in the reform’s implementation, we can identify the relevance of the capital requirements channel. We also document that the insurance industry crowds outs other investors in the new issuance of (high-yield) MBS.

scholarly journals Determinants of Financial Performance of Insurance Companies: Empirical Evidence Using Kenyan Data

2021 ◽  
Vol 14 (12) ◽  
pp. 566
Author(s):  
Kamanda Morara ◽  
Athenia Bongani Sibindi
Keyword(s):  
Financial Performance ◽  
Fixed Effects ◽  
Insurance Industry ◽  
Insurance Companies ◽  
Random Effects Models ◽  
Insurance Sector ◽  
Life Insurers ◽  
Insurance Firms ◽  
Financial Performance Measures ◽  
The Government

The drivers of financial success of the insurance industry are of interest to several players in any economy including the government; policymakers; policyholders; and investors. In Kenya; there have been relatively few studies on this topic; most of which look at narrow elements that determine insurance companies’ performance. This article sought to explore the components contributing to the financial performance of insurance firms. We employed a sample consisting of 37 general insurers and 16 life insurers for the period running from 2009 to 2018 and utilised panel data methods in order to establish the determinants of financial performance of Kenyan insurers. The pooled OLS; fixed effects and random effects models were estimated with the financial performance measures (proxied by either ROA or ROE) as the dependent variables. The results of the study documented that insurer financial performance and size were positively related. The study also found that insurer financial performance was negatively related to the age variable. The study also unraveled that higher leveraged insurance companies performed better than their lowly geared peers. This article provides broad analyses of the various drivers of financial performance of the insurance industry in Kenya. The findings of this study contribute to the academic literature on the financial performance of the insurance sector in Kenya and Africa as a whole. Furthermore; it gives pointers to the management of insurance companies on the aspects of their business that would need greater attention to drive and sustain superior financial performance.

scholarly journals Corporate Governance, Social Responsibility and Financial Performance of European Insurers

2017 ◽  
Vol 65 (6) ◽  
pp. 1873-1888 ◽  
Author(s):  
Oleg Deev ◽  
Nino Khazalia
Keyword(s):  
Corporate Governance ◽  
Social Responsibility ◽  
Financial Performance ◽  
Insurance Industry ◽  
Insurance Companies ◽  
Board Members ◽  
Socially Responsible ◽  
Un Global Compact ◽  
European Insurance ◽  
Corporate Social

In this paper, we focus on corporate governance and corporate social responsibility in European insurance industry and test its effects on financial performance. Using a sample of European insurance companies releasing corporate governance and social responsibility information available in Bloomberg Environmental, Social, and Governance disclosure, we provide evidence of better financial performance of insurers with unbiased and objective boards, increased number of board members (indicating that investors trust independent directors as protectors of shareholder value), lower employee turnover and higher community spending. Compliance with UN Global Compact signatory also contribute to better market performance. As a result, we show that insurance companies can be socially responsible and financially successful at the same time.

scholarly journals What drives the capital structure? The case of non-life insurance companies in Serbia

Industrija ◽  
2021 ◽  
Vol 49 (1) ◽  
pp. 25-41
Author(s):  
Miloš Božović ◽  
Marija Koprivica
Keyword(s):  
Capital Structure ◽  
Fixed Effects ◽  
Order Theory ◽  
Negative Influence ◽  
Positive Influence ◽  
Insurance Companies ◽  
Fixed Effects Model ◽  
Firm Level ◽  
Pecking Order Theory ◽  
The Capital Structure

This paper studies the factors behind the capital structure of insurance companies. We used financial reports of non-life and composite insurance companies in Serbia between 2006 and 2019. In particular, we apply a panel-data approach to examine the relationship between leverage, defined as the ratio of technical reserves to capital and various firm-level characteristics. The coefficients estimated using the individual fixed-effects model indicate a significant and negative influence of profitability, growth and liquidity measures on leverage and a significant and positive influence of company size. The results indicate that the tradeoff theory and the pecking order theory are relevant in explaining the non-life insurer capital structure in Serbia.

Can increased organic consumption mitigate climate changes?

2014 ◽  
Vol 116 (8) ◽  
pp. 1314-1329 ◽  
Author(s):  
Lennart Ravn Heerwagen ◽  
Laura Mørch Andersen ◽  
Tove Christensen ◽  
Peter Sandøe
Keyword(s):  
Climate Change ◽  
Fixed Effects ◽  
Climate Changes ◽  
Organic Food ◽  
Meat Consumption ◽  
Least Square ◽  
Mitigation Strategies ◽  
Fixed Effects Model ◽  
Climate Effect ◽  
Content Type

Purpose – The purpose of this paper is to investigate the evidence for a positive correlation between increased consumption of organic products and potential climate change mitigation via decreased consumption of meat and it is discussed to what extent organic consumption is motivated by climate change concerns. Design/methodology/approach – A fixed effects model together with a factor analysis and ordinary least square are used to analyse household purchase data for 2,000 households in 2006-2010 combined with survey questionnaire data from 2008. Findings – A small but statistically significant correlation between increasing organic budget shares and decreasing meat budget shares is found. People include food-related behaviour such as the purchase of organic food and reduced meat consumption as ways to mitigate climate change. However, other behavioural modifications such as reduction of car usage and household heating are perceived as more important strategies. Research limitations/implications – Other food-related mitigation strategies could be investigated. The climate effect of different diets – and how to motivate consumers to pursue them – could be investigated. Individual as opposed to household data would supplement the analyses. Practical implications – Demand-side policies aiming at climate-friendly consumption could be a central factor in combating climate change. Already, food-related mitigation strategies such as lowered meat consumption are established practices among a group of organic consumers. As some consumers believe that climate change can be mitigated by consuming organic food, the authors propose that this is taken into account in the development of organic farming. Originality/value – The authors propose a shift from analysing the climate-friendliness of production to addressing the climate-friendliness of consumption using consumption of organic food as a case. The authors link stated concerns for climate changes with actual food-related behaviour.

scholarly journals Heterogeneous Impacts of Extreme Climate Risks on Global Energy Consumption Transition: An International Comparative Study

Energies ◽  
2021 ◽  
Vol 14 (14) ◽  
pp. 4189
Author(s):  
Jiaying Peng ◽  
Yuhang Zheng ◽  
Ke Mao
Keyword(s):  
Climate Change ◽  
Energy Consumption ◽  
Panel Data ◽  
Fixed Effects ◽  
Energy Transition ◽  
Energy Structure ◽  
Global Energy ◽  
Climate Risks ◽  
Extreme Climate ◽  
The Impact

In response to the uncertainty of extreme climate change, energy consumption structure has been actively adjusted globally. Based on panel data of 101 countries or regions from 2006 to 2019, a panel data model with fixed effects is used to analyze the heterogeneous impacts of extreme climate risks on global consumption transition. The results show that extreme climate change has promoted the transition of the energy structure, reduced the consumption of fossil energy, and increased the consumption of renewable energy. Meanwhile, there are heterogeneous impacts of extreme climate change risks on the energy transition when different countries suffering from extreme weather conditions. Areas with high levels of economic development and coastal countries are more inclined to respond to climate change through energy transition. It is further confirmed that, under the impact of business cycle and oil price fluctuations, economic recession and falling oil prices will strengthen the correlation between climate risk and the global energy transition, and governments need to pay more attention to the impact of climate risks.

scholarly journals Insurance market as a segment of the EU financial market

2020 ◽  
Vol 19 (1) ◽  
pp. 111-117
Author(s):  
Aduard Barinov
Keyword(s):  
Financial Market ◽  
Insurance Industry ◽  
Digital Technologies ◽  
Insurance Market ◽  
Insurance Companies ◽  
The Internet ◽  
Large Share ◽  
European Insurance ◽  
High Degree ◽  
The Eu

The article examines the state of the insurance market, which is the largest investment investor in the EU. There is a high degree of concentration in the insurance market and the European insurance industry itself has a large share in the global insurance market. Various types of insurance activities are considered . Data on the volume of premiums are provided. New digital technologies, in particular the Internet system, widely used. The importance of regulating and supervising the activities of insurance companies in the EU financial market is emphasized.

scholarly journals Insurance Business and Sustainable Development

2021 ◽  
Author(s):  
Dietmar Pfeifer ◽  
Vivien Langen
Keyword(s):  
Climate Change ◽  
Sustainable Development ◽  
Risk Management ◽  
Sustainable Development Goals ◽  
Insurance Industry ◽  
Solvency Ii ◽  
Insurance Companies ◽  
Development Goals ◽  
Insurance Business ◽  
Early Modern Times

In this study, we will discuss recent developments in risk management of the global financial and insurance business with respect to sustainable development. So far climate change aspects have been the dominant aspect in managing sustainability risks and opportunities, accompanied by the development of several legislative initiatives triggered by supervisory authorities. However, a sole concentration on these aspects misses out other important economic and social facets of sustainable development goals formulated by the UN. Such aspects have very recently come into the focus of the European Committee concerning the Solvency II project for the European insurance industry. Clearly the new legislative expectations can be better handled by larger insurance companies and holdings than by small- and medium-sized mutual insurance companies which are numerous in central Europe, due to their historic development starting in the late medieval ages and early modern times. We therefore also concentrate on strategies within the risk management of such small- and medium-sized enterprises that can be achieved without much effort, in particular those that are not directly related to climate change. We start this study with a general overview of the UN sustainable development goals and their implementation in the financial sector world-wide, with a major focus on climate change aspects of investments in a lower carbon economy and economic support of underdeveloped countries that were prevailing until very recently. Although the insurance sector can be considered as a particular branch of the finance industry there are several particularities which need a separate consideration. In the first place, insurance provides a protection of individuals and companies against severe material and non-material losses. Therefore the insurance premiums must be invested safely, in particular under actual insurance regulations like Solvency II. But the insurance industry is also faced with new emerging risks due to climate change, in both the life and non-life sector. Moreover, the European development of insurance regulation has very recently focused also on other sustainability aspects than those related to climate change. We discuss this aspect of risk management in a separate section of this study. Finally, we discuss in detail appropriate strategies how small- and medium sized insurance companies in Europe can handle the new challenges of insurance supervision without too much effort. Our suggestions are mainly driven by own experiences from practice.

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