2017 Poontirakul Insurance as a double-edged sword.pdf (694.79 kB)

Insurance as a Double-Edged Sword: Quantitative Evidence from the 2011 Christchurch Earthquake

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journal contribution
posted on 15.04.2021, 03:18 by P Poontirakul, C Brown, E Seville, J Vargo, Ilan Noy
We examine the role of business interruption (BI) insurance in business recovery following the Christchurch earthquake in 2011. First, we ask whether BI insurance increases the likelihood of business survival in the immediate (3-6 months) aftermath of a disaster. We find positive but statistically insignificant evidence that those firms that had incurred damage, but were covered by BI insurance, had higher likelihood of survival post-quake compared with those firms that did not have any insurance. For the medium-term (2-3 years) survival of firms, our results show a more explicit role for insurance. Firms with BI insurance experience increased productivity and improved performance following a catastrophe. Furthermore, we find that those organisations that receive prompt and full payments of their claims have a better recovery than those that had protracted or inadequate claims payments, but this difference between the two groups is not statistically significant. We find no statistically significant evidence that the latter group (inadequate payment) did any better than those organisations that had damage but no insurance coverage. In general, our analysis indicates the importance not only of adequate insurance coverage, but also of an insurance system that delivers prompt claim payments. This is a post-peer-review, pre-copyedit version of an article published in 'The Geneva Papers on Risk and Insurance - Issues and Practice'. The final authenticated version is available online at: https://doi.org/10.1057/s41288-017-0067-y. The following terms of use apply: https://www.springer.com/gp/open-access/publication-policies/aam-terms-of-use.

History

Preferred citation

Poontirakul, P., Brown, C., Seville, E., Vargo, J. & Noy, I. (2017). Insurance as a Double-Edged Sword: Quantitative Evidence from the 2011 Christchurch Earthquake. Geneva Papers on Risk and Insurance: Issues and Practice, 42(4), 609-632. https://doi.org/10.1057/s41288-017-0067-y

Journal title

Geneva Papers on Risk and Insurance: Issues and Practice

Volume

42

Issue

4

Publication date

01/10/2017

Pagination

609-632

Publisher

Springer Science and Business Media LLC

Publication status

Accepted

Contribution type

Article

Online publication date

02/10/2017

ISSN

1018-5895

eISSN

1468-0440

Language

en

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