Impact of geopolitical risk on corporate insurance investment

Qiao Zhou, Lin Zhang and Hui Huang

Finance Research Letters, 2025, vol. 73, issue C

Abstract: This study examines the impact of geopolitical risk on Chinese firms’ corporate insurance investment. We find that an increase in geopolitical risk considerably increases enterprises willingness to purchase property insurance. Specific analysis indicates that an increase in geopolitical risk also leads to an increase in premium expenditure for enterprises that have purchased insurance. Mechanism analysis suggests that geopolitical risk indirectly drives enterprises to increase insurance coverage by increasing the volatility of their import and export activities. Moreover, compared to nonstate-owned enterprises, state-owned enterprises tend to increase insurance coverage when facing geopolitical risks.

Keywords: Geopolitical risk; Insurance; Decision-making; Import and export; Chinese industrial enterprise (search for similar items in EconPapers)
JEL-codes: F50 G22 G32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016969

DOI: 10.1016/j.frl.2024.106667

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