Work

The Effect of Environmental Damage Costs on the Performance of Insurance Companies

Year: 2024

Type: article

Abstract: We examine worldwide Property and Casualty and Life and Health insurance companies from 2004 until 2023, implementing panel regression models and mediation analyses to show that insurers raise their reserves when they face increasing costs for their potential environmental damages, ultimately reducing their profitability and underwriting capacity. Our findings extend to the insurance sector the previous evidence on banks, demonstrating that environmental damages could affect profits and solvency of financial intermediaries. These insights are important especially for insurance managers and regulators.

Source: Sustainability

DOI: 10.3390/su16198389

Authors: Silvia Bressan, Sabrina Du

Institutions: Free University of Bozen-Bolzano, St. Norbert College

Language: English

Topic: Insurance and Financial Risk Management

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Climate action

Open Access status: gold

Estimated APC paid: $2,728