Exploring the link between financial literacy and business interruption insurance: evidence from Italian micro-enterprises

Ornella Ricci () and Gianluca Santilli
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Ornella Ricci: University of Roma Tre
Gianluca Santilli: University of Rome Tor Vergata

The Geneva Papers on Risk and Insurance - Issues and Practice, 2024, vol. 49, issue 4, No 1, 663-681

Abstract: Abstract This article examines the relationship between financial literacy and business interruption (BI) insurance among Italian entrepreneurs. Following an increase in unexpected shocks, such as COVID-19 and geopolitical conflicts, a high level of BI risk is expected to persist, especially among small firms, which play a key role in the Italian economy. Using a Bank of Italy 2021 survey of 1998 non-financial firms with fewer than 10 employees, we show a significant positive association between the level of the entrepreneur’s financial literacy and the purchase of BI insurance. Our results highlight the key role of financial literacy in shaping risk management strategies and are robust to different model specifications, also addressing endogeneity concerns.

Keywords: Financial literacy; Business interruption insurance; Micro-entrepreneurs; Italy (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1057/s41288-024-00312-5

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