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Wang Y, Guo C, Xu Y, Xie M. Can major public health emergencies increase the participation of commercial insurance? Evidence from China. Front Public Health 2024; 12:1363451. [PMID: 38846605 PMCID: PMC11153771 DOI: 10.3389/fpubh.2024.1363451] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Figures] [Journal Information] [Subscribe] [Scholar Register] [Received: 01/12/2024] [Accepted: 05/13/2024] [Indexed: 06/09/2024] Open
Abstract
Background Public health emergencies have a lasting impact on a country's economic and social development. However, commercial insurance can disperse these negative consequences and reduce risk losses. Method Based on the Chinese Household Tracking Survey and Peking University Digital Inclusive Finance Index, this study employed a difference-in-differences model to test the impact of the COVID-19 outbreak on commercial insurance participation and the impact mechanism. Results The analysis showed that the outbreak of COVID-19 improved residents' risk perception, risk preference and digital finance and promoted their participation in commercial insurance, commercial endowment insurance, and commercial medical insurance. Conclusion Major public health emergencies can increase commercial insurance participation, but the promotional effect of commercial insurance on rural and low-income individuals is relatively limited. To tap into potential customers, financial institutions should focus on vulnerable societal groups. This study supplements the relevant literature on the impact of major public health emergencies on commercial insurance participation.
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Affiliation(s)
- Yiqiu Wang
- School of Finance, Nanjing Agricultural University, Nanjing, China
| | - Chong Guo
- School of Finance, Nanjing Agricultural University, Nanjing, China
| | - Yang Xu
- School of Finance, Nanjing Agricultural University, Nanjing, China
| | - Meng Xie
- School of Economics and Management, Henan Agricultural University, Zhengzhou, China
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2
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Schmitt A, Spaeter S. Providing pandemic business interruption coverage with double trigger cat bonds. THE GENEVA PAPERS ON RISK AND INSURANCE. ISSUES AND PRACTICE 2023; 48:1-27. [PMID: 37359235 PMCID: PMC10228458 DOI: 10.1057/s41288-023-00299-5] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Figures] [Subscribe] [Scholar Register] [Received: 08/30/2022] [Accepted: 04/17/2023] [Indexed: 06/28/2023]
Abstract
The aim of this paper is to show how qualified investors in cat bonds can offer adequate pandemic business interruption protection in a comprehensive public-private coverage scheme. First, we propose a numerical model to expose how cat bonds can contribute to complement standard re/insurance by improving coverage of cedents even though risks are positively correlated during a pandemic. Second, we introduce double trigger pandemic business interruption cat bonds, which we name PBI bonds, and discuss their precise characteristics to provide efficient coverage. A first trigger should be pulled when the World Health Organization declares a Public Health Emergency of International Concern (PHEIC). The second trigger determines the payout of the bond based on the modelised business interruption losses of an industry in a country. We discuss moral hazard, basis risk, correlation and liquidity issues which are critical in the context of a pandemic. Third, we simulate the life of theoretical PBI bonds in the restaurant industry in France by using data gathered during the COVID-19 pandemic.
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Affiliation(s)
- André Schmitt
- BETA, Université de Strasbourg, CNRS, 61, Avenue de la Forêt-Noire, 67085 Strasbourg Cedex, France
| | - Sandrine Spaeter
- BETA, Université de Strasbourg, CNRS, 61, Avenue de la Forêt-Noire, 67085 Strasbourg Cedex, France
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3
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Eggleton S, Gürses Ö. Reinsuring pandemics: the role of government and public-private partnerships between reinsurers and governments. THE GENEVA PAPERS ON RISK AND INSURANCE. ISSUES AND PRACTICE 2023; 48:1-25. [PMID: 36811094 PMCID: PMC9936477 DOI: 10.1057/s41288-023-00290-0] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Subscribe] [Scholar Register] [Received: 09/05/2022] [Accepted: 02/02/2023] [Indexed: 06/18/2023]
Abstract
Pandemic-related business interruption (BI) losses are generally considered 'uninsurable' because, in order to pool sufficient premium revenue to meet valid claims, premiums would be unaffordable for the majority of policyholders. This paper explores whether and how such losses might be made insurable in the U.K. The authors consider post-pandemic governmental responses, including the role of the Financial Conduct Authority (FCA) and the meaning and implications of FCA v Arch Insurance (U.K.) Ltd ([2021] UKSC 1). The central premise of the paper is to highlight the importance of reinsurance in increasing an underwriter's insuring capacity and to illustrate how, with the support of government in the form of a public-private partnership (PPP), 'uninsurable' risks of this type may be made insurable. The authors propose a PPP, 'Pandemic Business Interruption Re', which provides, in their view, a feasible and defensible solution that would confer the benefit of increasing policyholders' faith in the industry's ability to underwrite pandemic-related BI claims and reduce reliance on ex post government aid.
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Affiliation(s)
- Senara Eggleton
- The Dickson Poon School of Law, King’s College London, London, UK
| | - Özlem Gürses
- The Dickson Poon School of Law, King’s College London, London, UK
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4
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Louaas A, Picard P. A pandemic business interruption insurance. THE GENEVA RISK AND INSURANCE REVIEW 2023; 48:1-30. [PMID: 36712994 PMCID: PMC9875781 DOI: 10.1057/s10713-023-00080-7] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Figures] [Subscribe] [Scholar Register] [Received: 03/01/2022] [Accepted: 01/03/2023] [Indexed: 06/18/2023]
Abstract
We analyze how pandemic business interruption coverage can be put in place by building on capitalization mechanisms and a portfolio management strategy. As evidenced with COVID-19, pandemics affect economic sectors in differentiated ways: some are very severely affected because their activity is heavily impacted by travel bans and constraints on work organization, while others are more resistant. This opens the door to risk-coverage mechanisms based on a portfolio of financial securities, including long-short positions and options in stock markets. We show that such a strategy allows insurers to offer business interruption coverage in pandemic states, while simultaneously hedging the risks associated with alternating bullish and bearish non-pandemic states. These conclusions contrast sharply with the idea of governments being the only solution to the pandemic insurability problem. They are derived from a theoretical model of corporate risk management, and their practical relevance is illustrated by numerical simulations, using data from the French stock exchange.
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Affiliation(s)
- Alexis Louaas
- CREST-Ecole Polytechnique, Palaiseau Cedex, France, and Square Research Center, Paris, France
| | - Pierre Picard
- CREST-Ecole Polytechnique, Palaiseau Cedex, France, and Square Research Center, Paris, France
- Department of Economics, Ecole Polytechnique, 91128 Palaiseau Cedex, France
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5
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Abstract
This study aimed to predict the JKII (Jakarta Islamic Index) price as a price index of sharia stocks and predict the loss risk. This study uses geometric Brownian motion (GBM) and Value at Risk (VaR; with the Monte Carlo Simulation approach) on the daily closing price of JKII from 1 August 2020–13 August 2021 to predict the price and loss risk of JKII at 16 August 2021–23 August 2021. The findings of this study were very accurate for predicting the JKII price with a MAPE value of 2.03%. Then, using VaR with a Monte Carlo Simulation approach, the loss risk prediction for 16 August 2021 (one-day trading period after 13 August 2021) at the 90%, 95%, and 99% confidence levels was 2.40%, 3.07%, and 4.27%, respectively. Most Indonesian Muslims have financial assets in the form of Islamic investments as they offer higher returns within a relatively short time. The movement of all Islamic stock prices traded on the Indonesian stock market can be seen through the Islamic stock price index, namely the JKII (Jakarta Islamic Index). Therefore, the focus of this study was predicting the price and loss risk of JKII as an index of Islamic stock prices in Indonesia. This study extends the previous literature to determine the prediction of JKII price and the loss risk through GBM and VaR using a Monte Carlo simulation approach.
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6
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Harris TF, Yelowitz A, Courtemanche C. Did COVID-19 change life insurance offerings? THE JOURNAL OF RISK AND INSURANCE 2021; 88:831-861. [PMID: 34226761 PMCID: PMC8242708 DOI: 10.1111/jori.12344] [Citation(s) in RCA: 1] [Impact Index Per Article: 0.3] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Figures] [Subscribe] [Scholar Register] [Received: 11/25/2020] [Revised: 03/11/2021] [Accepted: 05/01/2021] [Indexed: 06/13/2023]
Abstract
The profitability of life insurance offerings is contingent on accurate projections and pricing of mortality risk. The COVID-19 pandemic created significant uncertainty, with dire mortality predictions from early forecasts resulting in widespread government intervention and greater individual precaution that reduced the projected death toll. We analyze how life insurance companies changed pricing and offerings in response to COVID-19 using monthly data on term life insurance policies from Compulife. We estimate event-study models that exploit well-established variation in the COVID-19 mortality rate based on age and underlying health status. Despite the increase in mortality risk and significant uncertainty, the results generally indicate that life insurance companies did not increase premiums or decrease policy offerings due to COVID-19. Nonetheless, we find some evidence that premiums differentially increased for individuals with very high risk and that some policies were removed for the oldest of the old.
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Affiliation(s)
| | - Aaron Yelowitz
- Department of Economics, Gatton College of Business and EconomicsUniversity of KentuckyLexingtonKentuckyUSA
| | - Charles Courtemanche
- Department of Economics, Gatton College of Business and EconomicsUniversity of KentuckyLexingtonKentuckyUSA
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7
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Nebolsina E. The impact of the Covid-19 pandemic on the business interruption insurance demand in the United States. Heliyon 2021; 7:e08357. [PMID: 34786513 PMCID: PMC8579736 DOI: 10.1016/j.heliyon.2021.e08357] [Citation(s) in RCA: 2] [Impact Index Per Article: 0.7] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Download PDF] [Figures] [Journal Information] [Subscribe] [Scholar Register] [Received: 05/07/2021] [Revised: 08/15/2021] [Accepted: 11/05/2021] [Indexed: 11/15/2022] Open
Abstract
The article investigates the Covid-19 pandemic related changes in the demand for insurance services in the Unites States due to business interruptions by employing panel vector autoregression models to a dynamic panel data set of 50 states and District of Columbia for three periods of time: 01 January, 2004 to 28 June, 2020; 01 January, 2004 to January 21, 2020 (pre-Covid period); January 22, 2020 to June 28, 2020 (Covid-period). This paper is the first attempt to obtain estimates by applying Google Trends with a search key word "Business Interruption Insurance". The data was collected and reduced to a single scale by US states within the widest possible time span. Google Trends Hits and Initial Claims for Unemployment Insurance Benefits are used as endogenous variables in the built models. In the constructed models, the impact of the exogenous variable New Covid Cases is compared with that of over US billion-dollar natural disasters. The impulse responses show a positive relationship between the Google Trends Hits and Initial Claims with the Covid-factor having a significant impact on the responses. The conducted analyses reveal that the demand for insurance services due to the Covid-19 outbreak in the United States can be expected to increase 2-6 times, with the total amount of the incurred costs for the economy due to the virus ranging from 0.3 to 7 percent of the US-2019 GDP. The results lay the foundation for recommending the insurance market participants to lobby for adoption of public-private protection schemes being able to secure a more efficient response to the pandemic-related losses that may occur in the future.
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Affiliation(s)
- Elena Nebolsina
- School of International Economic Relations, Moscow State Institute of International Relations (MGIMO-University), Moscow, Russia
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8
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Stojkoski V, Jolakoski P, Ivanovski I. The short-run impact of COVID-19 on the activity in the insurance industry in the Republic of North Macedonia. RISK MANAGEMENT AND INSURANCE REVIEW 2021; 24:221-242. [PMID: 34908828 PMCID: PMC8661886 DOI: 10.1111/rmir.12187] [Citation(s) in RCA: 2] [Impact Index Per Article: 0.7] [Reference Citation Analysis] [Abstract] [Track Full Text] [Figures] [Subscribe] [Scholar Register] [Received: 03/23/2021] [Revised: 06/17/2021] [Accepted: 07/01/2021] [Indexed: 06/14/2023]
Abstract
Recent studies suggest that the COVID-19 pandemic will induce drastic changes in the business models of the insurance industry. However, despite an abundance of predictions, the literature still lacks empirical investigations of the impact of the pandemic. In this paper, we perform a first of a kind analysis and investigate the short-run impact of COVID-19 on the activity in the insurance in one country-North Macedonia. By utilizing a seasonal autoregressive model, we find that during the first half of 2020, the activity in the insurance industry shrank by more than 10% to what was expected. The total loss in the industry amounted to approximately 8.2 million euros. This was much less than the volume of reserves that the Insurance Supervision Agency made available as funds for dealing with the potential crisis. In addition, the pandemic induced changes in the insurance activity structure-the share of motor vehicles class in the total industry activity fell at the expense of the property classes. Our results suggest that the insurance industry in North Macedonia was well prepared to tackle the consequences of the pandemic and that automatic stabilizers had a major influence on weakening the overall negative impact.
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Affiliation(s)
- Viktor Stojkoski
- Faculty of EconomicsSs. Cyril and Methodius UniversitySkopjeNorth Macedonia
- Association for Research and Analysis—ZMAISkopjeNorth Macedonia
| | - Petar Jolakoski
- Association for Research and Analysis—ZMAISkopjeNorth Macedonia
| | - Igor Ivanovski
- Faculty of EconomicsSs. Cyril and Methodius UniversitySkopjeNorth Macedonia
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9
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Paradigm of technological convergence and digital transformation: The challenges of CH sectors in the global COVID-19 pandemic and commencing resilience-based structure for the post-COVID-19 era. DIGITAL APPLICATIONS IN ARCHAEOLOGY AND CULTURAL HERITAGE 2021; 21. [PMCID: PMC9764235 DOI: 10.1016/j.daach.2021.e00182] [Citation(s) in RCA: 3] [Impact Index Per Article: 1.0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Subscribe] [Scholar Register] [Indexed: 05/12/2023]
Abstract
Technology and digitalization are vital for helping organizations to survive in the competitive marketplace. The global COVID-19 pandemic has fixated attention on the cultural heritage sectors. This study presents technological convergence and new digital platforms that require business societies to transform into new sustainable meanings. The concept of technological convergence to the autonomous ecosystem is supported by cutting-edge technologies, a distinctive life cycle for value-added creation. This study is based on a five-part conceptual context to examine the impact of pandemic on the cultural heritage sectors. The major impacts like institutional issues, financial limitations, data access policies, and stakeholders diverging views are fully addressed. An additional impression of this study is that it has comprehensively expressed the opportunities and capabilities of technological convergence in terms of competence, integration, impound and novelty for higher value creation most related to the cultural heritage sectors in the current and post COVID-19 pandemic era.
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10
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Buszko M, Orzeszko W, Stawarz M. COVID-19 pandemic and stability of stock market-A sectoral approach. PLoS One 2021; 16:e0250938. [PMID: 34014941 PMCID: PMC8136637 DOI: 10.1371/journal.pone.0250938] [Citation(s) in RCA: 10] [Impact Index Per Article: 3.3] [Reference Citation Analysis] [Abstract] [MESH Headings] [Track Full Text] [Download PDF] [Figures] [Journal Information] [Subscribe] [Scholar Register] [Received: 02/16/2021] [Accepted: 04/16/2021] [Indexed: 12/23/2022] Open
Abstract
The COVID-19 pandemic seems to be the most important phenomenon observed from March 2020 in virtually all countries of the world. The necessity to prevent the spread of COVID-19 and keep health care systems efficient resulted in the forced, drastic limitation of economic activity. Many service sectors were hit particularly hard with this but industry and agriculture were also affected. In particular, the pandemic substantially influenced financial markets and we can observe that some markets or instruments vary in stability since they have been affected in the different degree. In the paper, we present the problem of stability of stock markets during the COVID-19 pandemic. Due to the low number of works related to CEE countries during the pandemic, we analyze the Warsaw Stock Exchange, which is one of the most important markets in the CEE. Our main goal was to find how various industries represented by stock market indices have reacted to the COVID-19 shock and consequently which sectors turned out to keep stability and remained resistant to the pandemic. In our investigation, we use two clustering methods: the K-means and the Ward techniques with the criterion of maximizing the silhouette coefficient and six indicators describing stability in terms of profitability, volume, overbought/oversold conditions and volatility. The results of the research present that during the pandemic it was possible to identify 5 clusters of sector indices in the short term and 4 in the medium term. We found that the composition of the clusters is quite stable over time and that none of the obtained clusters can be univocally considered the most or the least stable taking into account all the analyzed indicators. However, we showed that the obtained clusters have different stability origins, i.e. they vary from each other in terms of the investigated indicators of stability.
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Affiliation(s)
- Michał Buszko
- Department of Financial Management, Faculty of Economic Sciences and Management, Nicolaus Copernicus University in Torun, Torun, Poland
| | - Witold Orzeszko
- Department of Applied Informatics and Mathematics in Economics, Faculty of Economic Sciences and Management, Nicolaus Copernicus University in Torun, Torun, Poland
| | - Marcin Stawarz
- Department of Applied Informatics and Mathematics in Economics, Faculty of Economic Sciences and Management, Nicolaus Copernicus University in Torun, Torun, Poland
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11
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Kielholz WB. Connecting the world's risk and insurance communities: why research-based dialogue is more important than ever. THE GENEVA PAPERS ON RISK AND INSURANCE. ISSUES AND PRACTICE 2021; 46:281-292. [PMID: 33846674 PMCID: PMC8028578 DOI: 10.1057/s41288-021-00224-8] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Track Full Text] [Subscribe] [Scholar Register] [Accepted: 02/24/2021] [Indexed: 06/12/2023]
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12
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Abstract
In 2020, the whole world had to face a pandemic with inevitable profound changes in all aspects of life, from the social to the economic sphere. The profound economic crisis that followed the rise of the pandemic has pushed firms and researchers to question the necessary changes and new challenges for the survival of businesses. In this scenario, the aim of the paper is to analyze and classify the main contributions published on the topic of COVID-19 in managerial literature, seeking to discover the perspective and the gaps and outline future avenues of research. A systematic review of the literature has been performed. The results highlight the orientation of studies in this field and the various links between different aspects that emerged. Limitations and implications complete the research.
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13
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Testing the Resilience of CSR Stocks during the COVID-19 Crisis: A Transcontinental Analysis. MATHEMATICS 2021. [DOI: 10.3390/math9050514] [Citation(s) in RCA: 4] [Impact Index Per Article: 1.3] [Reference Citation Analysis] [Abstract] [Track Full Text] [Subscribe] [Scholar Register] [Indexed: 12/23/2022]
Abstract
Investors and practitioners are increasingly concerned with financial assets within the scope of corporate social responsibility (CSR) meaning that, in recent times, such assets have become enshrined in the preferences of the new generations of investors and consumers. Just when the interest of investors was at its highest, SARS-CoV-2 (COVID-19) affected all international financial markets, so that, at first sight, it might seem that the financial assets assigned to CSR should have suffered collapses that were identical to the rest; however, our work shows the opposite, providing a comparative analysis of how the pandemic has affected the financial markets of each continent to demonstrate its outstanding resilience through the use of the Wavelets methodology. We analyzed the global impact of the registered cases of COVID-19 on the Dow Jones Sustainability World Index (DJSWI), the world’s leading indicator of sustainable companies, in addition to six other financial indices selected from each continent. The empirical results of this research show that the worldwide repercussions of the sudden outbreak of SARS-CoV-2 has had a substantially smaller effect on sustainability-related indices compared to the other considered indices. Similarly, the methodology employed allowed the establishment of a chronogram with details of the dating of COVID-19 expansion through the considered countries, a certain gradation in terms of the impact of the pandemic on these stock indices, and certain common guidelines describing their devastating effects on each of the financial markets represented by the indices in this research.
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Gerth F, Ramiah V, Toufaily E, Muschert G. Assessing the effectiveness of Covid-19 financial product innovations in supporting financially distressed firms and households in the UAE. JOURNAL OF FINANCIAL SERVICES MARKETING 2021; 26:215-225. [PMCID: PMC8126471 DOI: 10.1057/s41264-021-00098-w] [Citation(s) in RCA: 2] [Impact Index Per Article: 0.7] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Subscribe] [Scholar Register] [Received: 12/21/2020] [Revised: 04/16/2021] [Accepted: 04/27/2021] [Indexed: 09/02/2023]
Abstract
Covid-19 has affected the global economy, influencing firm and household financial decisions worldwide. The Central Bank of the United Arab Emirates (CBUAE) released an AED 256 billion stimulus package to provide banks with sufficient capital to support economic activities and development by providing temporary relief to large corporations, small- and medium-sized enterprises, and households. New financial products have rapidly appeared, including relief packages for rent, mortgages, personal loans, credit cards, SMEs, and corporate entities. Regression analysis explores the effect of such relief packages on UAE firm and household finances. Using online survey data gathered via convenience sampling of UAE households, econometric analysis confirms that select demographic factors and financial instruments positively relate to effective financial decision-making. Our results guide policymakers on which relief packages effectively manage firm-level and household financial distress during a health pandemic.
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Affiliation(s)
- Florian Gerth
- University of Wollongong in Dubai, Knowledge Park, Dubai, UAE
| | - Vikash Ramiah
- University of Wollongong in Dubai, Knowledge Park, Dubai, UAE
| | | | - Glenn Muschert
- Khalifa University of Science and Technology, Abu Dhabi, UAE
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15
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Qiu J. Pandemic risk: Impact, modeling, and transfer. RISK MANAGEMENT AND INSURANCE REVIEW 2020; 23:293-304. [PMID: 34790023 PMCID: PMC7753364 DOI: 10.1111/rmir.12160] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Figures] [Subscribe] [Scholar Register] [Received: 06/10/2020] [Revised: 11/06/2020] [Accepted: 11/10/2020] [Indexed: 06/13/2023]
Abstract
COVID-19 has proven that pandemic risk deems to the type of catastrophe risk that needs to be treated seriously, by both society and the insurance industry. A key element to measure, manage, and transfer pandemic risk is the modeling capability. This paper first reviews the insured loss from COVID-19 and the impact on the insurance industry. Then, current pandemic risk modeling capabilities and how insurance industry uses these models are evaluated. Some suggestions are made in terms of how these models can be improved in the future and how they can assist in insuring the pandemic risk. Finally, the nonmodeling elements of pandemic risk transfer and the government's role are discussed.
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Affiliation(s)
- Joseph Qiu
- American Risk and Insurance AssociationMalvernPennsylvaniaUSA
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16
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Muermann A, Rothschild C. Special issue "Covid-19: the economics of pandemic risks and insurance" of the Geneva Risk and Insurance Review. THE GENEVA RISK AND INSURANCE REVIEW 2020; 45:75-79. [PMID: 33013241 PMCID: PMC7520161 DOI: 10.1057/s10713-020-00057-w] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Track Full Text] [Subscribe] [Scholar Register] [Indexed: 06/11/2023]
Affiliation(s)
- Alexander Muermann
- Vienna University of Economics and Business and Vienna Graduate School of Finance (VGSF), Vienna, Austria
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17
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Hartwig R, Niehaus G, Qiu J. Insurance for economic losses caused by pandemics. THE GENEVA RISK AND INSURANCE REVIEW 2020; 45:134-170. [PMID: 32952463 PMCID: PMC7487336 DOI: 10.1057/s10713-020-00055-y] [Citation(s) in RCA: 1] [Impact Index Per Article: 0.3] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Subscribe] [Scholar Register] [Received: 07/13/2020] [Accepted: 08/25/2020] [Indexed: 05/12/2023]
Abstract
Private insurance coverage for economic losses caused by pandemics is limited. While many factors contribute to reduced demand and supply, we attribute the low amount of coverage to the high levels of capital that would be required to credibly insure pandemic economic losses with cross-sectional pooling mechanisms. Pooling over time significantly reduces the required capital and therefore the cost of insurance, but as a practical matter likely requires a government with the ability to borrow and tax. We also argue that insurance for economic losses due to pandemics likely generates positive externalities for the macroeconomy. We therefore analyze the general tradeoffs associated with different ways that a government can promote such insurance.
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Affiliation(s)
- Robert Hartwig
- Darla Moore School of Business, University of South Carolina, Columbia, USA
| | - Greg Niehaus
- Darla Moore School of Business, University of South Carolina, Columbia, USA
| | - Joseph Qiu
- American Risk and Insurance Association (ARIA)
, Malvern, USA
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