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The combined effect of enterprise risk management and diversification on property and casualty insurer performance

Date

2016-08-16

Authors

Ai, Jing, author
Bajtelsmit, Vickie, author
Wang, Tianyang, author
Journal of Risk and Insurance, publisher

Journal Title

Journal ISSN

Volume Title

Abstract

In a well‐designed enterprise risk management (ERM) program, the firm integrates risk management into the strategic planning process, addressing strategic, financial, operational, and hazard risks under a single overarching process. This is particularly important to large financial firms, such as property and casualty (P&C) insurers, which face a diverse set of risks. Using a sample of P&C insurers with S&P ERM quality ratings from 2006 to 2013, we find that the quality of a firm's ERM is a significant determinant of P&C insurer performance and that, for firms with high‐quality ERM programs, product line diversification has a significant positive effect on performance.

Description

Includes bibliographical references (pages 24-27).
Published as: Journal of Risk and Insurance, vol. 85, no. 2, June 2018, pp. 513–543. https://doi.org/10.1111/jori.12166.

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Subject

enterprise risk management (ERM)
diversification
property and casualty
insurance company performance

Citation

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