Economics of Data Systematic Review for Planning Strategies in the InsurTech industry

The knowledge of data enables exploring how value is created from data. Organizations’ strategic planning becomes easier if the value of data is understood and adopted. Unless managers know how to use data, its exploitable value remains limited. Previous studies assessed either data dimensions such as volume, variety, velocity, veracity and granularity, or data management processes. However, many of these topics have been treated with a technical approach and only a few focused on the data value in management, strategy, and planning. The ubiquitous of data has allowed insurance incumbents and startups to exploit technologies, from which InsurTech, leveraging a unique data-driven proposition and often gaining a competitive advantage. The paper aims to explore the economics of data, enabling to strategically plan data management practices. It contributes to the management and strategy literature with an evidence-based systematic literature review that embraces the value generated by knowing data sources, data types, extended data dimensions, analyzes enabling technologies, and extends data management practices for reaching organizations’ objectives in the InsurTech empirical context. In addition to further avenues of research, it provides managers with a theoretical data-valorization framework for data strategic planning, and institutions an overview for guiding the digital transformation. The novelty of this paper is the comprehensive focus on the economics of data at the intersection between traditional and emerging business models.The knowledge of data enables exploring how value is created from data. Organizations’ strategic planning becomes easier if the value of data is understood and adopted. Unless managers know how to use data, its exploitable value remains limited. Previous studies assessed either data dimensions such as volume, variety, velocity, veracity and granularity, or data management processes. However, many of these topics have been treated with a technical approach and only a few focused on the data value in management, strategy, and planning. The ubiquitous of data has allowed insurance incumbents and startups to exploit technologies, from which InsurTech, leveraging a unique data-driven proposition and often gaining a competitive advantage. The paper aims to explore the economics of data, enabling to strategically plan data management practices. It contributes to the management and strategy literature with an evidence-based systematic literature review that embraces the value generated by knowing data sources, data types, extended data dimensions, analyzes enabling technologies, and extends data management practices for reaching organizations’ objectives in the InsurTech empirical context. In addition to further avenues of research, it provides managers with a theoretical data-valorization framework for data strategic planning, and institutions an overview for guiding the digital transformation. The novelty of this paper is the comprehensive focus on the economics of data at the intersection between traditional and emerging business models

Collaborate or Perish: A Conceptual Framework for Banks and FinTechs Partnerships

In the Open Finance framework, collaboration of traditional incumbents (i.e., banks) with start-ups (i.e., FinTechs) is crucial for success. However, despite the frequency and relevance of such partnerships in the financial system, research in this field is rather limited, as most works address alliances regardless of the field of application. The limited number of publications related to finance shed light primarily on the motivations promoting interaction among banks and FinTech start-ups, overlooking additional aspects and players. Therefore, theaim of this work is to build a comprehensive framework allowing to properly frame alliances in the financial industry. Focusing on the Italian context, 90 public partnerships were analysed through document analysis ofpress releases. It emerges that the majority of the alliances do not involve investments in equity and attest strong participation and commitment of FinTech start-ups. On top of common knowledge, we uncovered other relevant variables to consider in this field when analysing each partnership: its direction, which depends on whether the relation resembles more an operative agreement or an industrial one; its field of interest, which details what the collaboration is about; and its addressees, identifying the targets of these alliances.These dimensions, along with the other ones in a comprehensive framework, will contribute to the enrichment of the literature, closing a relevant gap, and serve as a guide for practitioners in addressing these partnerships

An Enterprise Risk Management maturity model

In the recent years, Enterprise Risk Management (ERM) has emerged as a new risk management technique aimed to manage the portfolio of risks that faces an organization in a integrated, enterprise- wide manner. Unlike traditional risk management, where individual risk categories are managed from a silo-based perspective, ERM involves an holistic view of risks allowing to take into account correlations across all risk classes. The academic literature on ERM is focused on two main aspects: the analysis of the factors that influence ERM adoption and its effects on firms performances. No studies have been conducted yet to propose robust and rigorous models to evaluate the quality, or maturity, of ERM programs implemented by firms. The aim of the research described in this paper is to fill this gap in the literature. In order to build a rigorous ERM maturity model, we have run an e-mail Delphi procedure involving a panel of worldwide experts on ERM and reached their consensus on the selection of a set of ERM best practice parameters, which are used to develop a structured questionnaire to be administered to firms. Experts consensus in obtained also on the scales and the scores for each questionnaire answer option. The output of the Delphi method is a scoring model that can be used to assess the maturity of an ERM program by administering a questionnaire composed of 22 closed-end questions to firms: answers are collected and scored, and all scores are combined in a single final score, the ERM Index (ERMi). The robustness of the model has finally been tested on a small sample of firms. We foresee two different uses of the ERMi maturity model, one by scholars for further quantitative research on ERM topics, and one by practitioners, as ERMi is suitable to be used by firms for a self- assessment of their ERM programs (internal use), and by consultancy firms, auditors and rating agencies (external use). The difference with other existing maturity models is its solid scientific base, the rigour with which it has been designed and the fact that it is derived from a Delphi procedure involving leading ERM experts who reached consensus on the model detailed design

Corporate Governance and Shareholder Value in Listed Firms: An Empirical Analysis in Five Countries (France, Italy, Japan, UK, USA)

In this paper, we design a multi-dimensional index to measure the quality of Corporate Governance systems adopted by firms and use it to investigate the correlation between Corporate Governance quality and firm value. Unlike most studies that examine the relationship between only one dimension of Governance and firm value, we present a complex index (CGI) composed of 39 variables referable to four dimensions: Board, Remuneration, Shareholder Rights and Disclosure. By analysing a sample of 100 large companies listed on the main stock markets in five different countries over three years (2009-2011), we confirm the widespread hypothesis of the existence of a positive and statistically significant relationship between Corporate Governance, as measured by a subset of 12 variables, and firm value

An Enterprise Risk Management maturity model

In the recent years, Enterprise Risk Management (ERM) has emerged as a new risk management technique aimed to manage the portfolio of risks that faces an organization in a integrated, enterprise- wide manner. Unlike traditional risk management, where individual risk categories are managed from a silo-based perspective, ERM involves an holistic view of risks allowing to take into account correlations across all risk classes. The academic literature on ERM is focused on two main aspects: the analysis of the factors that influence ERM adoption and its effects on firms performances. No studies have been conducted yet to propose robust and rigorous models to evaluate the quality, or maturity, of ERM programs implemented by firms. The aim of the research described in this paper is to fill this gap in the literature. In order to build a rigorous ERM maturity model, we have run an e-mail Delphi procedure involving a panel of worldwide experts on ERM and reached their consensus on the selection of a set of ERM best practice parameters, which are used to develop a structured questionnaire to be administered to firms. Experts consensus in obtained also on the scales and the scores for each questionnaire answer option. The output of the Delphi method is a scoring model that can be used to assess the maturity of an ERM program by administering a questionnaire composed of 22 closed-end questions to firms: answers are collected and scored, and all scores are combined in a single final score, the ERM Index (ERMi). The robustness of the model has finally been tested on a small sample of firms. We foresee two different uses of the ERMi maturity model, one by scholars for further quantitative research on ERM topics, and one by practitioners, as ERMi is suitable to be used by firms for a self- assessment of their ERM programs (internal use), and by consultancy firms, auditors and rating agencies (external use). The difference with other existing maturity models is its solid scientific base, the rigour with which it has been designed and the fact that it is derived from a Delphi procedure involving leading ERM experts who reached consensus on the model detailed design

The impact of corporate governance on the market value of financial institutions: empirical evidences from Italy

This paper analyses how the quality of the Corporate Governance system impacts on the market value of Italian financial institution listed on Italian Stock Exchange. As implementing a good Corporate Governance is costly, this study is useful to verify if the investment is worth its cost. This work wants to fill a gap in literature: in fact there are few studies that have focused on financial institutions despite the central role that they hold in the real economy, especially in Italy where the enterprises are highly dependent on the banking system for their financing needs. First step of the work is the measurement of corporate governance quality. The Corporate Governance Index is used in order to achieve this objective. It is a scoring model that analyses 4 different macro-areas of governance that are Board, Compensation, Shareholders’ and Stakeholders’ Rights and Disclosure. After governance evaluation a Cross-sectional Data Regression is used to study the relationship between corporate governance and market value of financial institutions in the year 2010. The analysis proves that there is a positive and statistically significant correlation between corporate governance and performance for this kind of companies: this justify the importance of corporate governance and the convenience to invest in this in order to maximise market value of company

Rationales for Corporate Risk Management - A Critical Literature Review

This paper describes theoretical motivations for corporate risk management activities and empirical evidence provided by different scholars on such rationales. These theoretical considerations can be extended also to the new risk management practices such as enterprise risk management. Based on modern financial theory’s assumption that markets are perfectly efficient, organizations should not implement risk management practices since they cannot contribute to add firm value. However, in the presence of market imperfections, risk management, stabilizing firm’s earnings, can benefit companies in the following manners: reducing transaction costs especially the expected costs of bankruptcy, lowering corporate taxes, aligning financing and investment policies and reducing costs associated with agency problems and asymmetric information

The Impact of Corporate Governance on the Market Value of Financial Institutions - Empirical Evidences from Italy

This paper analyses how the quality of the corporate governance system impacts on the market value of the financial institutions listed on the Italian Stock Exchange. Implementing a good corporate governance is costly, therefore verifying whether the investment is worth its cost is a relevant issue. Despite the central role that financial institutions play in the real economy, there are few studies that focus specifically on the financial industry; filling this gap in literature is especially relevant to Italy, where the enterprises are highly dependent on the banking system for their financing needs. The first step of the present study is the assessment of the corporate governance quality of the sample companies through the Corporate Governance Index (CGI). CGI is a scoring model that analyses four different macro-areas of governance: Board, Compensation, Shareholders’ and Stakeholders’ Rights, and Disclosure. A Cross-sectional data regression is then used to study the relationship between the corporate governance quality and the market value of financial institutions. The analysis, using 2010 data, proves that there is a positive and statistically significant correlation between corporate governance and performance: this finding supports the hypothesis that governance creates value for companies and that investments to implement effective governance systems give net positive benefit and should therefore be pursued. Hence financial institutions should be encouraged to improve their corporate governance systems