THE IMPACT OF INSURTECH ON RISK-TAKING BEHAVIOR IN INSURANCE COMPANIES: EVIDENCE FROM CHINA
Keywords:
InsurTech, Risk-taking, COVID-19, Difference in differenceAbstract
In the realm of risk management, InsurTech is not only pivotal for insurance companies to maintain their financial stability, but also serves as a significant gauge of a healthy insurance market. Drawing upon data from the insurance industry at the provincial level in China from 2010 to 2021, this paper investigates the impact of InsurTech on risk-taking capacity in the context of the COVID-19 pandemic shock. Using the shock of the pandemic as a natural experiment, this study successfully identifies a causal relationship between InsurTech and risk-taking in the insurance industry, unveiling a mechanism of influence spanning from InsurTech to risk identification and management efficiency, and subsequently to risk-taking capacity. Our findings suggest that, under the pandemic shock, InsurTech considerably augments risk-taking behavior in the insurance industry. The insights derived from this study bear significant practical implications for managing risk-taking at the provincial level in the insurance industry, particularly in the context of emerging technology adoption and pandemic shocks, thereby fostering stability and healthy development in the insurance sector.References
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