Risk taking, performance, and resilience to the COVID-19 pandemic: Evidence from public property-casualty insurers

We examine the heterogeneous impacts of asset, product, and financial risks on property-casualty insurers' performance and their resilience to the COVID-19 pandemic. To address the potential endogeneity problem in risk taking, a panel dataset of public property-casualty insurers around the world is studied using a two-stage least squares analysis. The results show that asset and product risks enhance performance, while financial risk reduces it. In addition, property-casualty insurers are resilient to the adverse effects of COVID-19, with the exception of insurers with high asset and product risks. These findings highlight the importance of considering different dimensions of risk when evaluating property-casualty insurers. Regulators, investors, and analysts should take into account the potential impact of asset, product, and financial risks on insurers' performance and resilience, particularly in the context of the COVID-19 pandemic. •This study investigates the effects of asset, product, and financial risks on insurers' performance and resilience.•Asset and product risks enhance performance, while financial risk reduces it.•Insurers demonstrate resilience to the pandemic, with the exception of insurers with high asset and product risks.•Regulators, investors, and analysts should consider the effects of different risks on insurers' performance and resilience.