City Research Online

Abstract

We study convergence in the attention of decision‐makers across the insurance and banking industries. Our analysis is based on textual risk disclosures (10‐K reports, 2006–2018), providing a snapshot of corporate priorities and contexts. We theoretically link convergence with decision‐making contexts via the Attention‐Based View. Leveraging strategic management theory, we identify antecedents of convergence in attention and, therefore, potentially, risk contagion. These include common trends in the macro‐environment, substitution threats, and management fashions. We combine this theoretical framework with machine learning tools to create quantitative measures of convergence in attention and its antecedents. We find that the proposed measure of convergence is predictive of inter‐ and intra‐industry stock correlations. Finally, based on regression and sensitivity analyses, we identify the relative importance of different antecedents, showing that shared risk management fashions largely drive Inter‐industry convergence in attention. This highlights challenges when interpreting regulatory text data in the context of predicting contagion risk.

Publication Type:	Article
Additional Information:	© 2025 The Author(s). Journal of Risk and Insurance published by Wiley Periodicals LLC on behalf of American Risk and Insurance Association. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
Publisher Keywords:	contagion, industry convergence, management attention, risk disclosure, systemic risk, text analysis
Subjects:	H Social Sciences > HG Finance
Departments:	Bayes Business School Bayes Business School > Faculty of Actuarial Science & Insurance Bayes Business School > Faculty of Management
SWORD Depositor:	Symplectic Administrator

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