 Enterprise risk management and solvency: The case of the listed EU insurersDuc Khuong Nguyen and Dinh-Tri Vo Journal of Business Research, 2020, vol. 113, issue C, 360-369 Abstract: We investigate the relationship between Enterprise Risk Management (ERM) adoption and solvency for publicly listed insurers in the European Union. Our results, which control for endogeneity problem, show that ERM-adoption insurers experience a decrease in their solvency level, which may trigger their financial vulnerability in the case of unexpected shocks. Firm-specific characteristics such as leverage, ROA, combined-ratio and business type are also found to significantly increase the EU insurers’ solvency, whereas the impact of firm size and age is insignificant. Moreover, insurers that have adopted the ERM share the common characteristics of higher performance, higher leverage, bigger size, and more diversified businesses. Finally, the demand of the market is an important factor of ERM adoption and insurance solvency. Keywords: Risk management; ERM; Insurance; Solvency (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:113:y:2020:i:c:p:360-369 DOI: 10.1016/j.jbusres.2019.09.034 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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