The Combined Effect of Enterprise Risk Management and Diversification on Property and Casualty Insurer Performance
Vickie Bajtelsmit and
Tianyang Wang ()
Journal of Risk & Insurance, 2018, vol. 85, issue 2, 513-543
In a wellâ€ designed enterprise risk management (ERM) program, the firm integrates risk management into the strategic planning process, addressing strategic, financial, operational, and hazard risks under a single overarching process. This is particularly important to large financial firms, such as property and casualty (P&C) insurers, which face a diverse set of risks. Using a sample of P&C insurers with S&P ERM quality ratings from 2006 to 2013, we find that the quality of a firm's ERM is a significant determinant of P&C insurer performance and that, for firms with highâ€ quality ERM programs, product line diversification has a significant positive effect on performance.
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jrinsu:v:85:y:2018:i:2:p:513-543
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