Investigating Risk Disclosure Practices in the European Insurance Industry

2011 ◽  
Author(s):  
Dirk Höring ◽  
Helmut Gründl
Keyword(s):  
Insurance Industry ◽  
Risk Disclosure ◽  
European Insurance

scholarly journals The effectiveness of risk disclosure practices in the European insurance industry

2018 ◽  
Vol 17 (1) ◽  
pp. 130-147
Author(s):  
Irma Malafronte ◽  
Maria Grazia Starita ◽  
John Pereira
Keyword(s):  
Firm Value ◽  
Stock Return ◽  
Insurance Industry ◽  
Return Volatility ◽  
Risk Disclosure ◽  
Content Type ◽  
Stock Return Volatility ◽  
Embedded Value ◽  
European Insurance ◽  
The Relationship

Purpose This paper aims to examine whether risk disclosure practices affect stock return volatility and company value in the European insurance industry. Design/methodology/approach Using a self-constructed “risk disclosure index for insurers” (RDII) to measure the extent of information disclosed on risks and using panel data regression on a sample of European insurers for 2005-2010, it tests the relationship between RDII and stock return volatility; whether this relationship is affected by financial crisis; and whether RDII affects insurance companies’ embedded value. Findings The main results indicate that higher RDII contributes to higher volatility, suggesting that “less is more” rather than “more is good”. However, higher RDII leads to lower volatility when the insurer has a positive net income, thus “more is good when all is good” and “less is good when all is bad”. Furthermore, the relationship between RDII and stock return volatility is not affected by financial crisis, raising concerns regarding the effectiveness of insurers’ risk disclosure to reassure the market. Moreover, higher RDII is found to impact positively on embedded value, thus contributing toward higher firm value. Practical implications The findings could drive insurers’ choices on communication and transparency, alongside regulators’ decisions about market discipline. They also suggest that risk disclosure could be used to strengthen market discipline and should be added to the other variables traditionally used in stock return volatility and firm value estimation models in the insurance industry. Originality/value This paper offers new insights in the debate on the bright and dark sides of risk disclosure in the insurance industry and provides interesting implications for insurers and their stakeholders.

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.

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