There is an ongoing debate on the value of Enterprise Risk Management (ERM), a new comprehensive method of handling risk. This paper seeks to address this issue by examining whether ERM helps property and casualty insurers withstand financial crisis. An investigation of a sample of publicly traded US insurance companies during the recent financial turmoil reveals that not all ERM programs are beneficial. While insurers with well-designed ERM programs outperformed the market, ineffective programs resulted in below-market performance. It was also found that quality ERM insurers had lower stock volatility and higher profitability as compared to those of their non-ERM or weak ERM peers. The worst overall operating ratio was reported by companies with weak ERM programs.
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