We examine whether firms with high organization capital (OC) are more likely to purchase Directors’ and Officers’ (D&O) liability insurance, using a panel of Chinese A-share listed companies from 2009 to 2021. We document a robust positive association between OC and the propensity to carry D&O insurance. The effect remains statistically and economically significant after controlling for firm characteristics and employing multiple identification strategies to address endogeneity. We propose two economic channels through which OC affects D&O insurance demand, namely, agency and information asymmetry. Consistent with these mechanisms, we find that the positive OC–D&O relationship is significantly stronger in firms with weaker internal governance and those facing opaquer information environments. Additional cross-sectional analyses show that this effect is concentrated in privately-owned firms and in regions with more developed market institutions, suggesting that external pressures accentuate the value of insuring key decision-makers. Our results are robust to alternative model specifications and remain stable after using propensity score matching, instrumental variable approaches, and the Heckman two-stage model. Overall, the findings highlight OC as a critical internal driver of corporate insurance decisions. Firms with substantial intangible assets strategically obtain D&O coverage to strengthen governance and reduce information frictions, especially in emerging markets like China where formal investor protections are still evolving.

While unintentional man-made disasters constitute the majority of man-made catastrophes, empirical evidence on their economic consequences remains scarce. Utilizing a unique dataset on extremely severe accidents (ESAs) in China and a nationally representative longitudinal household survey, we find that unintentional man-made disasters reduce individuals' willingness to take risks. We further demonstrate that the severity of official penalties following ESAs is positively correlated with both fatalities and economic losses, yet these punitive measures fail to mitigate the negative impact on risk preferences. Additionally, we find that ESAs reduce demand for riskier, high-return-oriented insurance products, though they do not diminish demand for protection-oriented, non-investment productslike health insurance. Our findings address a critical gap in the literature regarding the effects of unintentional manmade disasters on risk attitudes and insurance demand.

Climate change is increasing the risks of weather-related disasters in many regions around the world. This has an adverse socio-economic impact on households, farmers and small businesses. Some strategies for effectively managing climate related disasters include index based insurance products, which are increasingly offered as alternatives to traditional insurance, particularly in low-income countries. However, the uptake of index insurance remains low, which can be partially attributed to the inherent problem of basis risk. This review assesses the problem of

Low demand for crop insurance, even when subsidized at highly favorable rates, remains a challenge for policymakers in developing countries attempting to create insurance-based farm safety nets. Evidence from a series of surveys and experiments with 477 vegetable farmers in China reveals several anomalies in farmers’ demand for crop insurance as well as deviations from predictions under both expected utility theory and cumulative prospect theory. Farmers are willing to pay higher price for neutral-frame risk protection tool than for an insurance-frame equivalent. Moreover, they tend to be more likely to purchase low-coverage than high-coverage insurance, even when high coverage provides greater subsidized value. Among risk- and loss-averse farmers, who theoretically should be more interested in adopting risk protection tools, we find less willingness to purchase high-coverage level insurance.