Risk Management Policies Research Articles

Conceptualizing the corporate-social accountability and sustainability assessment of weather-risk management policy towards stakeholders using qualitative insights: a case of weather index insurance

Purpose Sustainability assessment of risk-management policies has been needed to analyze their corporate social impact on stakeholders in terms of environmental, social and governance (ESG) and corporate social responsibility (CSR) accountability aspects. Thus, weather index insurance (WII) is a significant risk-management policy; there is a need to explore the corporate socio-environmental impact of WII on stakeholders. Thus, the purpose of this study is to develop a theoretical framework for theorizing the sustainability reporting aspect of WII. Design/methodology/approach This study performs qualitative exploratory research using in-depth interviews with ten experts. It has been carried out through semi-structured interviews with academic and professional experts and analyzed the interview transcripts using qualitative analysis. Findings This study’s outcomes contribute a new paradigm in the ESG and CSR accountability domain from the perspectives of stakeholder theory. The findings of this study reported a novel conceptual framework for integrated sustainability reporting of WII based on ESG and CSR constructs. The thematic content analysis of interview transcripts and WII literature exposed the significant accountability of WII towards human, ecological and financial capital. Practical implications This study provides valuable insights into the theoretical development of WII sustainability domain by developing a theoretical framework that provides a further pathway for future researchers. Social implications This study attempts to analyze the WII exposure toward ESG and CSR dimensions that are helpful for insurers, farmers, managers and governments. Originality/value This study firstly bridges the gap between WII theoretical knowledge and professional practice in terms of sustainability assessment of WII.

The basis of bacteriological safety in the neonatal intensive care unit (literature review)

Background. According to world statistics, 7% of patients out of 100 in high-income countries and 15% of patients out of 100 in low- and middle-income countries develop infections related to medical care. As follows from the report of the World Health Organization, one in four cases of hospital sepsis that occurred in the intensive care unit is caused by hospital strains. On average, one in ten of these patients has a hospital-acquired infection that is fatal. The high-risk group includes patients in intensive care units, including newborns. In 2023, 28973 cases of neonatal infections (including intrauterine infection) were registered in medical organizations of the Russian Federation. The highest rates of neonatal morbidity were recorded in the Sverdlovsk Region (42.2%), the Trans-Baikal Territory (33.0%), the Novosibirsk Region (26.0%), the Chelyabinsk Region (22.4%), the Krasnoyarsk Territory (21.8%) and the Irkutsk Region (21.3%). Thus, infection prevention and control strategies aimed at both patients and their environment are of paramount importance in neonatal intensive care units.Objective. To summarize current relevant data on the prevention of hospital infections in neonatal intensive care units.Materials and methods. A literature review was conducted using the MEDLINE database (PubMed) as of December 2024 using keywords and a filter: randomized controlled trial, meta-analysis, systematic review.Results. This review summarizes the main data on the prevention of hospital infections in neonatal intensive care units. According to the literature, ensuring bacteriological safety in relation to the development of hospital infections depends on many factors: hand hygiene of medical personnel, organization of venous access control, disinfection of medical equipment and premises, compliance with the rules of asepsis and antiseptics when performing invasive manipulations, the introduction of modern approaches in the care of premature infants.Conclusion. There are many tasks in the intensive care unit that require innovative strategies to ensure the safe care of premature newborns. Joint efforts to standardize the processing of specialized equipment, maintain the cleanliness of the environment, comply with vascular access care protocols, adequate hand hygiene, and the active introduction of parents into newborn care are an integral part of the program aimed at preventing nosocomial infections. Active cooperation between the neonatal intensive care unit and the epidemiological service of the institution will allow us to develop a rational policy for risk management and monitoring of hospital infections.

First among equals: The implementation of integrated disaster risk management and climate change policies in Pacific Island Countries

First among equals: The implementation of integrated disaster risk management and climate change policies in Pacific Island Countries

Quantum internal models for Solvency II and quantitative risk management

Abstract This paper extends previous research on using quantum computers for risk management to a substantial, real-world challenge: constructing a quantum internal model for a medium-sized insurance company. Leveraging the author’s extensive experience as the former Head of Internal Model at a prominent UK insurer, we closely examine the practical bottlenecks in developing and maintaining quantum internal models. Our work seeks to determine whether a quadratic speedup, through quantum amplitude estimation can be realised for problems at an industrial scale. It also builds on previous work that explores the application of quantum computing to the problem of asset liability management in an actuarial context. Finally, we identify both the obstacles and the potential opportunities that emerge from applying quantum computing to the field of insurance risk management.

The Effect of Financial Innovation, Risk Management, and Monetary Policy on the Stability of Fintech Startup Companies in Jakarta

This study investigates the effects of financial innovation, risk management, and monetary policy on the stability of fintech startup companies in Jakarta. Using a quantitative approach, data were collected from 35 fintech startups through structured questionnaires with responses measured on a Likert scale of 1-5. Data analysis was conducted using SPSS version 25, employing correlation and multiple regression analysis. The results reveal that financial innovation is the most significant predictor of fintech stability, followed by risk management and monetary policy. The combined influence of these factors explains 74% of the variance in fintech stability. These findings underscore the importance of integrating innovation with robust risk management practices and aligning operations with macroeconomic trends for sustained stability. This research provides valuable insights for fintech stakeholders and policymakers to foster resilience and growth in the rapidly evolving financial ecosystem.

Bank board diversity and environmental risk management: does critical mass matter in project finance decisions?

PurposeThis study investigates the influence of board gender diversity on policy decisions within the banking sector, with a specific focus on the adoption of environmental risk management policies. Drawing on critical mass theory, we provide empirical evidence demonstrating the positive impact of women directors on the implementation of environmental risk management policies aligned with the equator principles (EP) framework.Design/methodology/approachWe analyze data from 540 banks operating in 34 countries over a ten-year period (2013–2022).FindingsOur findings indicate that banks with at least four women directors on their boards are more likely to adopt such policies. Our results remain statistically significant after controlling for endogeneity issues.Practical implicationsThis research advocates for increased female representation on bank boards to foster the adoption of sustainability-focused policies within the banking industry.Originality/valueWe also contribute by providing insights into the role of a diverse board in improving green credit practices among global banks.

Fusing multi-model climate risk assessment and insurance profitability prediction: a machine learning-based cross-country comparative analysis

Climate change-induced increases in the frequency and intensity of extreme weather events year after year pose a significant challenge to the profitability of the global insurance industry. Traditional risk assessment models have limitations in predicting insurance profitability due to the difficulty in coping with the nonlinearity and complexity of climate risk. To this end, this study proposes a multi-model fusion approach that combines fuzzy assessment models, entropy weighting, linear regression, and machine learning models (LightGBM & XGBoost) to assess the impact of climate risk on the profitability of the insurance industry. By analyzing cross-country empirical data from the U.S. and U.K. insurance markets, this study reveals the differences and challenges in coping with climate risk in different countries. The findings show that climate risk significantly affects the profitability of insurance companies and that machine learning models exhibit higher accuracy and reliability in risk prediction compared to traditional methods. This paper provides an empirical basis for insurers and policymakers to address the economic impacts of climate change and makes recommendations for optimizing insurance risk management.

Flood risk assessment through large-scale modeling under uncertainty

Abstract. The complexity of flood risk models is intrinsically linked to a variety of sources of uncertainty (hydrology, hydraulics, exposed assets, vulnerability, coping capacity, etc.) that affect the accuracy and reliability of the analyses. Estimating the uncertainties associated with the different components allows us to be more confident in the risk values on the ground, thus providing a more reliable assessment for investment, insurance and flood risk management purposes. In this study, we investigate the flood risk of the entire Central Apennines District (CAD) in Central Italy using the laRgE SCale inUndation modEl – Flood Risk (RESCUE-FR), focusing on the interaction between the uncertainty in the hydraulic Manning parameter and the risk variability. We assess the coherence between the quantile flood risk maps generated by our model and the official risk maps provided by the Central Apennines District Authority (CAD Authority) and focusing on three specific zones within the CAD region. Thus, RESCUE-FR is used to estimate the expected annual damage (EAD) and the expected annual population affected (EAPA) across the CAD region and to conduct a comprehensive uncertainty analysis. The latter provides a range of confidence of risk estimation that is essential for identifying vulnerable areas and guiding effective mitigation strategies.

HBM4EUchromates study: the Portuguese integrated and harmonized study on exposure to hexavalent chromium and related early effects.

In the scope of the European Union (EU) human biomonitoring initiative, a multicentric study on different occupational settings from several European countries was performed, to provide information on occupational exposure to hexavalent chromium [Cr(VI)], a known lung carcinogen. Biomonitoring approaches were used to obtain exposure data to support the implementation of new risk management measures and policy actions at the national and European levels. This work describes the Portuguese contribution to the study, which aimed to assess workers' exposure to Cr, by using exposure biomarkers (urinary chromium [U-Cr]), and industrial hygiene samples (air and hand wipes) and to link exposure to potential long-term health effects by using effect biomarkers. Exposure determinants influencing exposure were explored from the contextual information and human biomonitoring data. The ultimate goal of the study was to appraise the risk management measures contributing to minimize exposure and protect workers' health. Several occupational settings and activities were considered, including plating, welding, and painting. A control group from the Portuguese general population was also included. Data on age, sex, and smoking habits from both groups were considered in the statistical analysis. Information on the risk management measures available for workers was collected and used to identify the ones that mainly contributed to reduce exposure. Environmental monitoring and human biomonitoring revealed that painters were the highest exposed group. The use of respiratory protection equipment showed an influence on total U-Cr levels for workers involved in painting activities. Concerning early health effects, the painters presented also a significantly higher level of DNA and chromosomal damage in peripheral blood cells, as compared to the control group, suggesting a plausible association between exposure to Cr(VI) and early genotoxic effects. The results showed that workers are exposed to Cr(VI) in those occupational settings. These findings point to the need to improve the prevention and risk management measures and the implementation and enforcement of new regulatory actions at the national level.

Finding Common Ground a comparison between coastal nature-based solutions in the Netherlands and British Columbia, Canada

Many coastal communities worldwide are facing challenges caused by increasing sea levels. However, urban development, population growth and industrialisation in low-lying delta regions persists. This includes the Netherlands and British Columbia, Canada. Both regions explore new and innovative flood risk and adaptation strategies by initiating nature-based solutions (NBS) pilot projects and integrating research and community initiatives. The aim of this paper is to learn from the experiences with these NBS pilots and support practitioners with insights and knowledge about the prospectives and implementation process of NBS. Our study takes a bird's eye view by diving into four NBS case study projects that try to enhance flood defence and quality of life while considering ecosystems and community values simultaneously. To better understand current initiatives on NBS, we first describe the historical trajectories of flood risk management and climate adaptation policy in both countries. Then we analyse two urban and two suburban case studies to identify and compare enablers and barriers that surround the implementation of NBS. We use the Pilot Paradox as a framework to reflect on the enablers and barriers, and to formulate recommendations for barriers that are common ground. We found that upscaling of the pilots forms an important challenge in both countries. We also found that Canada is interested in exchanging technical knowledge, experiences, and insights with other countries through the involvement of international researchers, consultants, and students in projects. Such collaboration between countries, communities, practitioners, and academics could accelerate the development of innovative climate adaptation strategies worldwide.

Approximation of the Ultim Ruin Probability by the Finite Difference Method of a Variable-memory Process (HAWKES process) With a Distribution of WEIBULL

In insurance risk management, the probability of ruin is a very important metric to assess. In this article, we give an approximation of the probability of ruin at the infinite horizon, where the inter-arrivals of claims follow the HAWKES process and the amount of claims follows the WEIBULL distribution, with independence between its two processes. This approximation is made using numerical analysis methods, it consists in solving a second-order integro-differential equation of which two cases are considered on the parameterηof WEIBULL: ifηis equal to 1, then the distribution of the amounts of claims is exponential, which brings us back to the risk model established in Badini et al. (2024). On the other hand, ifηis greater than 1, then the results lead us to a system of linear equations for which we use the finite di_erence method to obtain a numerical solution. This method is used in both cases (η = 1 andη> 1) for u ranging from 0 to 100, so we obtain the analytical solution.

Study on the Effect of Extreme Weather on Bank Credit Risk

In the global economic landscape, the potential impact of extreme weather issues on banks has attracted much attention. This study focuses on the impact of extreme weather on the credit risk of A-share listed banks and explores its role in financial stability. Given China's significant position in the global economy, analyzing the credit risk faced by its banking sector has both theoretical and practical value. By synthesizing bank financial data, weather records and macroeconomic indicators, this study quantifies the potential impact of extreme weather events on bank credit risk, taking into account the moderating effects of heterogeneity among bank types and regional bank competition. The results reveal the existence of an association between extreme weather and bank credit risk-taking and provide a basis for bank risk management and regulatory policies.

The impact of climate risk on bank profitability through liquidity creation channel: empirical evidence from G7 countries

AbstractThis study investigates the impact of climate change-induced risk on bank profitability in the G7 countries from 2001 to 2022. Using dynamic panel GMM estimation to analyse banking industry data with climate risk factors, we find that climate risk has a negative effect on bank profitability. The study also demonstrates that bank liquidity creation plays a key role in transmitting the adverse impact of climate risk on bank profitability. Additionally, the results of the study are robust and withstand different measures of bank liquidity creation. Furthermore, our empirical findings indicate that the influence of climate risk factors is consistent, even for banks primarily focussed on the insurance business. These findings suggest that policymakers may need to implement climate risk management policies to mitigate the detrimental effects of climate change on the banking sector.

Natural Hazard Assessment in the Southeastern Margin of the Ría de Arosa (Pontevedra, Spain) Using GIS Techniques

The characterization of natural hazards in coastal environments is of great necessity, especially in the current context of global climate change and increasing population concentrations. This research focuses on a multi-hazard analysis of the main geotechnical, geomorphological, hydrological, and lithological risks in the southeastern margin of the Ría de Arosa using Geographic Information System techniques. The integration of geotechnical characterization maps and natural hazard maps has allowed for the identification of areas with a high susceptibility to natural disasters, which is crucial for territorial planning and management in the context of growing urban pressure and global climate change. The results indicate that poorly consolidated surface formations, especially in transitional areas such as dunes and marshes, are particularly vulnerable. Additionally, areas with higher lithological competence have been identified, where slope changes contribute to ground instability. This analysis provides valuable tools for decision-making and the implementation of risk management policies, promoting sustainable development, the protection of coastal ecosystems, and the prevention of risks from urban planning and civil engineering activities in the Ría de Arosa.

Challenges of mainstreaming institutional policy and frameworks of disaster risk management in Ethiopia

ABSTRACT This research examines the challenges of mainstreaming disaster risk management (DRM) policies and frameworks into the existing institutional structures in Ethiopia. Employing an exploratory sequential mixed method approach, incorporating qualitative and quantitative data collection and analysis, the study delves into the effectiveness of DRM implementation within the Ethiopian context. Primary data was mainly collected through a survey of 120 individuals and interviews with 18 experts. The findings showed that the Ethiopian sector encountered significant challenges in integrating DRM policies and frameworks due to limited resources and capacity. Implementation faced obstacles like insufficient data, coordination gaps between government agencies, and a lack of awareness among stakeholders. Additionally, frequent natural disasters exacerbate these challenges, demanding more robust and adaptive DRM strategies. The study underscores the necessity of enhancing the capacity of governmental institutions, civil society organisations, and local communities through targeted training programmes and knowledge-sharing platforms to facilitate effective DRM implementation. Moreover, the research emphasises the apparent gap related to the policies and frameworks and the imperative of strengthening institutional coordination and collaboration among relevant government ministries, agencies, and stakeholders, advocating for the establishment of inter-ministerial task forces or committees dedicated to DRM.

The Marginal Value of Cash: Corporate Savings, Investment, and Financing

The fact that internal liquidity is a key source of corporate funding puts the marginal value of cash at the center of a variety of firm decisions, including investment, payout, financing, savings, and risk management policies. The marginal value of cash is inherently a dynamic concept, because a firm facing financing frictions has to be forward-looking, managing its asset and liability structures in a unified framework and carefully trading off the use of liquidity across time and states. We present a dynamic framework for corporate liquidity management and survey the related literature, with a focus on the determinants of the marginal value of cash and its ubiquitous role in firm decisions.

Risk-oriented source apportionment and implications for mitigation strategies of VOCs in industrial parks: Insights from odor pollution and health risks

A typical industrial park in the upper reaches of the Yangtze River Economic Belt, which is 70 km from the Chongqing urban center, was used to investigate the occurrence and exposure of harmful volatile organic compounds (VOCs). An exposure risk method and a risk-oriented source apportionment approach were performed to assess the inhalation risks and apportion VOC sources, respectively. The quantitative relationships between risk factors and pollution sources were established, identifying key pathogenic and odorous VOCs. The quantitative emission reduction strategies were developed based on risk thresholds. Residents within the industrial parks face potential health risks due to pathogenic VOCs and nuisance odors, and workers in specific sectors experience two to six times higher risks than those in residential areas. Six risk sources were identified in the industrial park, ranked according to their contribution to VOC concentrations as follows: industrial sewage treatment (IST) (32.59 %), natural gas chemical industry (NGCI) (27.77 %), diesel vehicle exhaust (DVE) (12.04 %), pharmaceutical manufacturing industry (PMI) (11.14 %), chemical raw materials manufacturing (CRMM) (9.96 %), and iron and steel industry (ISI) (6.5 %). Among these, NGCI, IST, and CRMM were the top contributors to pathogenic risks, with contributions of 32.13 %, 29.71 %, and 21.71 % to non-carcinogenic risks, and 18.15 %, 19.87 %, and 27.99 % to carcinogenic risks, respectively. DVE produced significantly higher odor pollution compared to other sources, with intensities that were 3 to 10 times greater. The key pathogenic and odorous VOCs differ by source, resulting in varying control priorities for different VOC species. Reducing emissions from these six sources for 20 high-risk species (e.g., acrolein, 2-chlorotoluene, 1,2-dibromoethane, dichloromethane, and p-diethylbenzene) will simultaneously lower pathogenic and odor risks, with cumulative reduction rates ranging from 4.11 % to 93.75 %. This study provides quantitative control targets for VOCs from a health risk perspective, offering valuable guidance for developing risk management policies in industrial parks.

African sovereign risk premia and international market assets: A relook under the COVID-19 outbreak

Using the wavelet multiscale coherence technique, the paper examines the interdependences between global market assets, sovereign credit default swap (CDS) and yield-to-maturity on bond spread for African economies from January 2019 to March 2023. The empirical results primarily reveal a high level of coherence between global market assets and Africa's sovereign CDS and yield-to-maturity, although varying across countries and time-frequency domain. Notably, the high degree of coherence and the positive co-movement between sovereign CDS and global market assets are more concentrated at the medium and upper frequency bands. The observed intensity of co-movements between global market assets and sovereign CDS/yield-to-maturity (YTM) of bond spread, with global market assets broadly serving as leading variables, suggests that an increased global investor's risk aversion positively affects the yields on Africa market bonds. Among the global market assets, we identified that VIX (which is implied volatility of S&P500) has the dominant influence on Africa sovereign CDS/YTM compared to that emanating from Bitcoin and Godman Sachs Commodity Index. This is highly conceivable as VIX gauges bubbling global risks and uncertainties which considerably influences investor's risk aversion. The heterogeneous lead/lag dynamics also provide useful information to global investors, including by utilizing African markets to rebalance their portfolios for risk management purposes. The empirical findings thus provide further critical information to investors for hedging purposes, and to policymakers in formulating sovereign risk management policies oriented towards minimizing sovereign default risks.

Influence of Supply Chain Diversification on the Performance of Large Food and Beverage Processing Companies in Nairobi City County, Kenya

The performance of food and beverage manufacturing companies has become a pressing concern due to the rising incidence of supply chain disruptions, which pose significant threats to achieving operational goals. This study investigates the influence of supply chain diversification on the performance of large food and beverage processing companies in Nairobi City County. Supply chain disruptions have been linked to severe financial repercussions, including lower stock returns and increased failure rates, necessitating innovative management strategies. Utilizing a quantitative correlational research design, the study surveyed all 46 major food and beverage companies in the region, targeting procurement, financial, operations, and supply chain managers. Data collection was conducted via questionnaires, achieving an impressive response rate of 81%, underscoring the representativeness of the findings. Statistical analysis revealed a strong positive correlation between supply chain diversification and organizational performance, with an R-squared value of 0.650, indicating that approximately 65% of performance variability could be attributed to diversification practices. Regression analysis confirmed that each unit increase in diversification significantly enhanced performance metrics. These results align with existing literature, emphasizing the need for proactive diversification strategies to mitigate risks and enhance operational efficiency. Recommendations include continuous investment in diversifying supplier bases, adopting advanced technologies such as artificial intelligence, and implementing regular training programs for staff. Furthermore, strategic partnerships with suppliers and routine assessments of risk management policies are vital for maintaining competitive advantages. This research highlights the critical role of supply chain diversification in enhancing performance in the food and beverage sector, providing insights that are essential for navigating the complexities of modern supply chains. Future research should explore comparative studies across different sectors, longitudinal impacts of diversification, and qualitative insights from industry leaders to further enrich understanding in this area. By addressing these recommendations and research avenues, food and beverage manufacturing companies can enhance their resilience and ensure sustained performance in an ever-evolving market landscape..

دراسة العلاقة بين ثقافة المخاطر واتخاذ القرار في القطاع الشبه حكومي في المملكة العربية السعودية بالتطبيق على الهيئة العامة للأوقاف

The study aimed to identify the relationship between risk culture with its dimensions (implementation of risk management policies and procedures, level of risk awareness) and decision-making with its dimensions (quality of decisions made, support of top management) by applying it to the General Authority for Awqaf as a semi-government sector. The study also sought to assess the level of employees’ awareness in the Authority of the importance of risk management through examining the study dimensions and the relationship between the two variables (risk culture and decision-making). This research followed the descriptive-analytical approach and utilized a questionnaire as a tool for collecting primary data. The study population consisted of employees at the General Authority for Awqaf, totaling 500 participants. A random sample of 217 individuals was studied, and the data analyzed using SPSS and Excel software, employing various statistical methods to test the research hypotheses. The main findings of the research included the following: In the risk culture dimension, the application of risk management policies and procedures received an overall mean of 4.0285 and a standard deviation of 0.0984, while the level of risk awareness dimension received an overall mean of 4.1522 and a standard deviation of 0.1308. In the decision-making dimension, the quality of decisions made received an overall mean of 4.0285 and a standard deviation of 0.0984, while the support of top management dimension received an overall mean of 4.0199 and a standard deviation of 0.92582. The study also found a statistically significant positive relationship between risk culture and decision-making across their respective dimensions. Among the key recommendations of the study were providing the necessary support for risk management from top management to facilitate the implementation of policies and procedures within the organization, ensuring commitment across all management levels, developing a comprehensive strategy to support risk culture within management strategies, as this approach will help unify the vision and enhance integration among departments, thus achieving organizational goals more effectively, and encouraging the utilization of risks as growth opportunities, which would enhance institutional performance.