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The stock price of European insurance companies: What is the role of ESG factors?

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  • Di Tommaso, Caterina
  • Mazzuca, Maria

Abstract

The study investigates the effect of environmental, social, and governance (ESG) ratings on the stock price of European insurance companies using the event study methodology. ESG ratings play an important role in the pricing of insurance firms, and an upgrade results in a stock price increase, while a downgrade leads to a decrease. The market is particularly responsive to ESG rating upgrades and downgrades during the Pre-Paris period, suggesting that ESG ratings can have a significant impact on the equilibrium and efficiency of the stock market. ESG factors are important in investment decision-making and in promoting sustainable business practices.

Suggested Citation

  • Di Tommaso, Caterina & Mazzuca, Maria, 2023. "The stock price of European insurance companies: What is the role of ESG factors?," Finance Research Letters, Elsevier, vol. 56(C).
    • Handle: RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323004439
    DOI: 10.1016/j.frl.2023.104071
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    1. Pandey, Dharen Kumar & Kumari, Vineeta & Palma, Alessia & Goodell, John W., 2024. "Impact of ESG regulation on stock market returns: Investor responses to a reasonable assurance mandate," Finance Research Letters, Elsevier, vol. 64(C).

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