Impact of COVID-19 on the Effectiveness of Financial Management of Insurance Companies in Mainland China

Abstract

The COVID-19 pandemic starting in 2019 has brought significant disruption and turbulence to the global economy, specifically the financial sector. At the same time, the increased awareness of risk in businesses, governments, and individuals should alleviate this disruption to the insurance industry. However, the general trend of the Chinese insurance industry varies among companies, specifically into three types: companies with healthy financial conditions and positive subsidiary expansion, unhealthy financial conditions and negative subsidiary expansion, and unhealthy financial conditions and positive subsidiary expansion. By studying five listed prominent insurance companies in China using qualitative methods, researchers found a general relation between the financial metrics of an insurance company and the subsidiary expansion number, but this relationship isn’t inclusive. The cause of this variation is the difference in choosing a risky or prudent financial strategy and the adaptation to digital transformation.