Economics at your fingertips  

Cyber risk management in the US banking and insurance industry: A textual and empirical analysis of determinants and value

Nadine Gatzert and Madeline Schubert

Journal of Risk & Insurance, 2022, vol. 89, issue 3, 725-763

Abstract: In this paper, we first construct a cyber risk consciousness score using a text mining algorithm, applied to annual reports of large‐ and mid‐cap US banks and insurers from 2011 to 2018. We next categorize the firms' cyber risk management based on keywords to study determinants and value‐relevance. Our results show an increasing cyber risk consciousness, regardless of the industry. In addition, for the entire sample we find that firms belonging to the banking industry, with a higher cyber risk consciousness score and a higher general risk awareness are more likely to implement cyber risk management, which also holds for both industries separately. We find the opposite in the case of profitable firms for the entire sample and the insurer subsample. Finally, we observe a significant positive relationship between cyber risk management and firm value measured by Tobin's Q for the entire sample and the subsamples of banks and insurers.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

Journal of Risk & Insurance is currently edited by Joan T. Schmit

More articles in Journal of Risk & Insurance from The American Risk and Insurance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2022-10-15
Handle: RePEc:bla:jrinsu:v:89:y:2022:i:3:p:725-763