The impact of COVID-19 pandemic on abnormal returns of insurance firms: a cross-country evidence

Farooq, Umar; Nasir, Adeel; Bilal, B; Quddoos, Muhammad Umer

doi:10.1080/00036846.2021.1884839

Cited by 34 publications

(23 citation statements)

References 56 publications

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“…Additionally, calculations were done for [0,20], [0,30], [0,40] to show that the event had no long lasting (prolonged) effect (Schell et al, 2020), with results revealing that the CAARs were positive after 10-20 days [5] Finally, to check the significance of the results we use the Wilcoxon z test (Wilcoxon, 1945) since our data does not follow a normal distribution [6] (Liu et al, 2020). Moreover, as in related studies (Farooq et al, 2021), due to the correlation among stock markets in similar events, we use the t-test for cross-sectional correlation of ARs based on Kolari and Pynn€ onen (2010), obtaining quantitatively and qualitatively similar results.…”

Section: Methodsmentioning

confidence: 99%

Impact of COVID-19 on listed European electricity companies: a comparative analysis of investment in renewable and traditional electricity

Clemente-Almendros

Boldeanu

Seguí-Amórtegui

2021

JES

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PurposeThe authors analyze the impact of COVID-19 on listed European electricity companies and differentiate between renewable and traditional electricity, to show the heterogenous characteristics of electricity subsectors and the differences between renewable and traditional electricity.Design/methodology/approachUsing the event study method, the authors calculate the cumulative average abnormal returns (ARs) before and after the World Health Organization pandemic announcement and the declaration of national lockdowns in Europe.FindingsThe results show that while the European electricity sector was overall negatively impacted by the COVID-19 announcement, this impact was larger for renewable companies due to their riskier investment profile. Moreover, after the national lockdowns came into effect, the recovery in the financial markets return was smaller for the latter.Research limitations/implicationsThere may be variables to be included in the model to analyze possible differences between companies and countries, as well as alternative econometric models. Limited to the data, the authors did not investigate the different impact of the economic policy uncertainty from various countries inside or outside the EU.Practical implicationsThe results have important implications for both investors and policymakers since the heterogenous characteristics of electricity subsectors. This heterogeneity prompts different investor reactions, which are necessary to know and to understand.Originality/valueAs far as the authors know, this is the first study that analyses the effect of COVID-19 in heterogeneity profile of both types of electricity, renewable and traditional.

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Section: Methodsmentioning

confidence: 99%

Impact of COVID-19 on listed European electricity companies: a comparative analysis of investment in renewable and traditional electricity

Clemente-Almendros

Boldeanu

Seguí-Amórtegui

2021

JES

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“…Despite the significant financial losses produced by Covid, the insurance industry was not adequately prepared to deal with the losses (Levantesi & Piscopo, 2020). Similarly, (Farooq et al, 2021) conducted a study on Australia, Canada, Germany, the USA, UK, Brazil, India, and Indonesia found Covid-19's negative effect on the stock returns both in the short and long terms on insurance firms. Other studies like; (Kirti & Shin, 2020) alarmed that this pandemic will keep impacting insurers directly and indirectly via health shocks such as an increase in mortality and morbidity and indirectly via financial shocks, which are higher credit spreads, lower equity prices, and widespread downgrades.…”

Section: Literature Reviewmentioning

confidence: 95%

The Impact of Covid-19 on the Insurance Industry of Bangladesh

2021

IJFB

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This study investigates the impact of Covid-19 on the insurance industry of Bangladesh. We utilize a quarterly panel data of top-performing both life and non-life companies for the duration between Q1:2018 to Q1:2021. We depend on the quantitative method to determine the exact scenario implementing through the fixed effect model. The finding explains that the adverse effect of the pandemic is significant on the quarterly premium income, insurance density, and penetration. A robustness test further justifies the validity of the findings. We discuss the causes behind decline to portraits real scenario of such harsh impact. The sector demands potential measures that ensure a stable situation.

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“…COVID-19 has compelled world governments to apply lockdowns, provide subsidies and make relevant policy changes to cope with the disease. Farooq et al found a significant negative impact of COVID-19 on stock returns of the insurance sector of developing and developed countries (Farooq et al 2021). Furthermore, the adverse impact of this pandemic on stock returns have been reported in Chinese industries (He et al 2020), in the transportation sector (Alam et al 2021), in the Pakistani banking sector (Shahzad et al 2021) and in the U.S. stock market (Alam et al 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

Testing Stock Market Efficiency from Spillover Effect of Panama Leaks

Nasir

Gherghina

Mata

et al. 2022

JRFM

Self Cite

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On 3 April 2016, Mossack Fonseca provided the historically most significant leak of its shareholder’s data for owning offshore companies. Shareholders include many political and influential figures around the globe, which causes a moral hazard. The study analyses the effects of Panama leak events on five stock exchanges to ensure the market efficiency and investor perception related to the Panama leaks. Event study methodology is used on five occasions associated with Panama papers, i.e., the resignation of the Prime Minister of Iceland on 5 April 2016, Jurgen Mossack’s resignation on 7 April 2016, the resignation of the Spanish Minister of Industry on 15 April 2016, the 450 personalities of Pakistan that were nominated in Panama papers on 15 April 2016, and the formation of an inquiry commission to inquire into the matter. The market efficiency of five stock exchanges was checked, i.e., the KSE 100 of Pakistan, the OMXIPI exchange of Iceland, the IBEX 35 of Spain, the New York stock exchange (NYSE), and S&P 500. The market remains efficient for most events and investor behaviour changes for one or two days around the event day (this event has concise term significant abnormal returns in all stock exchanges or concise term significant abnormal macroeconomic effects are observed in all stock exchanges).

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The impact of COVID-19 pandemic on abnormal returns of insurance firms: a cross-country evidence

Cited by 34 publications

References 56 publications

Impact of COVID-19 on listed European electricity companies: a comparative analysis of investment in renewable and traditional electricity

Impact of COVID-19 on listed European electricity companies: a comparative analysis of investment in renewable and traditional electricity

The Impact of Covid-19 on the Insurance Industry of Bangladesh

Testing Stock Market Efficiency from Spillover Effect of Panama Leaks

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