We investigate the effects of adopting enterprise risk management (ERM) on the performance and risks of European publicly listed insurance firms. Using a dataset for 24 years, we report new results which show that ERM adopters realize significant ERM premiums after controlling for other covariates and endogeneity. Several firm characteristics such as size, opacity, and the choice of external monitoring agents such as auditors are significant determinants of adopting ERM. We fill a gap in the literature by assessing the impact of adopting ERM on firm risks and report new findings for our sample, which show that ERM adopters effectively reduce firm total and systematic risks and, to a greater extent, idiosyncratic risk. Firm-level variables such as size, leverage, dividend payments events, and diversification impact firm total risk. Insurers use corporate events such as dividend payments to signal information about reducing risk. Industry and international diversification reduce firm total risk and idiosyncratic risk, respectively.

This paper examines the effect of Shariah screening on performance. We use the constituents of the ASX200 to identify Shariah‐compliant investments (SCI) using eight different Shariah screening methods (SSMs) and investigate the effect of quantitative screening ratios and purification ratios on performance. We find significant differences in the constituents of the SCI universe and performance across SSMs. Our results demonstrate consistent evidence that the debt and purification ratios are negatively associated with SCI performance. However, we find mixed results for the impact of liquidity ratios on performance.

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