Operational Risks in the Insurance Industry
- Topics:
- Insurance,
- Risk Analysis and Management
- Tags:
- Business Operations,
- Management,
- Insurance Industry,
- Insurance Company,
- Insurance,
- Industry,
- Financial Planning,
- Finance,
- Corporate Insurance,
- Strategy
- Source:
- University of Pennsylvania
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Overview: This paper provides information on operational risk in the US insurance industry and presents evidence on the stock market impact that operational loss events have on the affected, publicly-traded insurers and on the industry as a whole. The author finds that operational loss events have significant negative effects on the market value of affected insurers. The effect of operational losses goes beyond the firm that incurs them. The large losses studied in this paper affect investor's assessment for the whole industry and not just the company itself. The significant damage to the market values of both the insurers and the insurance industry caused by operational losses should provide an incentive for operational risk management in the US insurance industry.
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Format: PDF | Size: 570KB | Date: Sep 2003 | Pages: 84
