A unique natural experiment in China – the city-level staggered introduction of admin-istrative approval centers (AAC) – reduces bank loan processing times by substantially speeding up the process of registering collateral without affecting credit decisions. Fol-lowing the establishment of an AAC, firms significantly reduce their cash holdings. State-owned enterprises are less affected. Cash flow sensitivity of cash holdings de-creases, as does the cash flow sensitivity of investment. The share of short-term debt increases, while inventory holdings and reliance on trade credit decrease. Defaults also decrease. These results suggest that timely access to credit has important implications on firms’ financial management.

Reputation is widely regarded as a stabilizing factor in financial institutions, reducing capital constraints and enhancing firm resilience. However, in the insurance industry, where capital requirements are shaped by solvency regulations and policyholder behavior, the effects of reputation on capital management remain unclear. This paper examines the unintended consequences of reputation in insurance asset-liability management, focusing on its impact on capital allocation. Using a novel reputation risk measure based on large language models (LLMs) and actuarial models, we show that reputation shifts influence surrender rates, altering capital requirements. While higher reputation reduces surrender risk, it increases capital demand for investment-oriented insurance products, whereas protection products remain largely unaffected. These findings challenge the conventional wisdom that reputation always eases capital constraints, highlighting the need for insurers to integrate reputation management with capital planning to avoid unintended capital strain.