Financial resilience of insurance network during Covid-19 pandemic

Alessandra Cornaro ()
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Alessandra Cornaro: University of Milano - Bicocca

Quality & Quantity: International Journal of Methodology, 2023, vol. 57, issue 2, No 3, 172 pages

Abstract: Abstract We provide a novel approach for analysing the financial resilience of the insurance sector during coronavirus pandemic. To this end, we build temporal directed and weighted networks where the weights on the arcs take into account the tail dependence between couple of firms. To assess the resilience of the network, we provide a new global indicator, aimed at capturing the impact on the clustering coefficient of a shock affecting in turn each firm and diffusing in the network via shortest paths. A local measure of resilience is also provided by quantifying the contribution of each firm to the global indicator. In this way, we are able to detect most critical firms in the system. A numerical application has been developed in order to test the proposed approach. The results show that the proposed resilience measure appears able to detect main periods of financial crises. The first wave of COVID-19 pandemic results as a extreme phenomenon in the market and the lowest resilience is associated to the period in which COVID-19 has been declared pandemic.

Keywords: COVID-19; Insurance market; Resilience; Complex networks; Clustering Coefficient (search for similar items in EconPapers)
JEL-codes: D85 G01 G28 G32 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s11135-022-01583-7

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