scholarly journals EXAMINING THE EFFECTS OF FINANCIAL FACTORS ON PROFITABILITY OF GENERAL INSURANCE COMPANIES IN KENYA

2020 ◽  
Vol 5 (1) ◽  
pp. 1
Author(s):  
Joseph Nthuli Ngunguni ◽  
Dr Sedina Misango ◽  
Dr. Martin Onsiro
Keyword(s):  
Regression Coefficient ◽  
Secondary Data ◽  
Annual Reports ◽  
Insurance Companies ◽  
P Value ◽  
Unique Contribution ◽  
Loss Ratio ◽  
Leverage Ratio ◽  
Financial Factors ◽  
General Insurance

Purpose: The objective of this study was to examine the financial factors which affect the profitability of general insurance companies in Kenya. The profitability in this study is represented by ROA, as dependent variable for the period 2013 to 2017. Independent variables in this study were liquidity, leverage, loss ratio and expenses ratio. Methodology: The type of research design used in this study was both descriptive as well as referential analysis. The study applied a census procedure to study all the 28 general insurance companies and targeted the entire population of 28 companies. Secondary data was collected from individual annual published financial statements of 28 general insurance companies for 5 years; 2013 to 2017, AKI reports and IRA published annual reports. A collection data sheet was used to collect the relevant data from all the 28 general insurance companies. After the data was collected and sorted, it was analyzed using referential analysis (multiple regression analysis). This was assisted by SPSS (Version 20) software. Findings: The study revealed that the regression coefficient of loss ratio was -0.068, t-statistics -0.415 and p-value of 0.682 while that of leverage ratio was -0.048, t-statistics -0.546 and p-value of 0.590. Liquidity ratio had a regression coefficient of 4.238, t-statistics 3.257 and p-value of 0.003 while expenses ratio had a regression coefficient of -0.281, t-statistics -3.840 and p-value of 0.001. Unique contribution to theory, practice and policy: The study recommends that the management of general insurance companies in Kenya need to address liquidity and expenses by minimizing expenses and maximizing liquidity in order to be on the safe side as far as profitability is concerned. The study also recommends that regulators and other stakeholders, within the industry, should at regular interval intensify efforts to ascertain the claims handling procedures currently in use by insurance companies in Kenya.

scholarly journals Assessment of measurement and ranking of technical efficiencies of Ethiopian general insurers

2020 ◽  
Vol 18 (4) ◽  
pp. 334-350
Author(s):  
Kishor Meher ◽  
Abebe Asfawu ◽  
Maheswaran Muthuraman ◽  
Sanjay Kumar Satapathy
Keyword(s):  
Key Management ◽  
Management Practices ◽  
Descriptive Analysis ◽  
Returns To Scale ◽  
Secondary Data ◽  
Annual Reports ◽  
Insurance Companies ◽  
General Category ◽  
Optimal Scale ◽  
General Insurance

The non-life insurance companies indemnify the properties from the risk of being damaged due to unforeseen events like natural calamity or accidents. The probability of bankruptcy is imminent on account of large, unprecedented claims. As a risk saver of various society stakeholders, these insurers must be efficient while managing the insurance business. The present research thrusts upon to evaluate the efficiency and decomposition that would further direct the insurers towards achieving optimal scale. Thus, the captioned research aims to measure and rank the technical efficiency of the general insurance firms of Ethiopia and evaluate and analyze their relative efficiencies. The research adopts a quantitative approach and deploys descriptive analysis by a panel data of 17 Ethiopian general insurers for the period 2005-2016 on the input-output-oriented approach of Data Envelopment Analysis (DEA). The data of general insurance are obtained using stratified sampling from the mix of life and general category. The inputs employed are total expenses, total liabilities, and shareholder’s fund, while net premiums earned and income from investments are used as outputs. The findings reveal that the public insurer is technically efficient by operating at an optimal scale as compared to all private insurers who, in turn, experience pure technical inefficiency to scale inefficiency due to poor management practices and erroneous utilization of input materials. Increasing Returns to Scale (IRS) witnessed a major form of scale inefficiency in 2016. Private insurers should increase capital and size of assets, cost efficiency, and improve key management skills. AcknowledgmentThe authors express their thanks of gratitude for the support extended by Ethiopia’s insurance companies’ officials to provide the hard copies of published annual reports up to 2016 as the secondary data are not available after that year’s analysis.

A DEA-investigation of efficiency of the Indian general insurance during recession

2014 ◽  
Vol 11 (1) ◽  
pp. 115-136 ◽  
Author(s):  
Santanu Mandal ◽  
Surajit Ghosh Dastidar
Keyword(s):  
Malmquist Index ◽  
Secondary Data ◽  
Annual Reports ◽  
Insurance Companies ◽  
Operating Characteristics ◽  
Content Type ◽  
Insurance Sector ◽  
General Insurance ◽  
Using Data ◽  
The Impact

Purpose – The purpose of this paper is to investigate the efficiency analysis of the Indian general insurance sector using data envelopment analysis (DEA) and subsequently assess the impact (if any) of the global slowdown on the performance of the allied sector. Design/methodology/approach – The paper aims to analyze the operating performance of 12 general insurance companies in India between 2006-2007 and 2009-2010 using DEA based on secondary data collected from Insurance Regulatory and Development Authority Annual Reports. Findings – Findings clearly indicate that the global economic slowdown has severely affected the performance of the private sector companies; while the public sector companies exhibited relatively lesser variation in performance levels. Research limitations/implications – The methodology employed in the study estimates relative efficiencies without assuming any functional form; as a result the proper comparison of input utilized with the output produced is not possible. Several other tools like Malmquist Index and two-stage procedure have not been used. Originality/value – The study brings into light the operating characteristics and efficiencies of the Indian general insurance sector during the global slowdown and therefore holds practical value for policy makers and practitioners as well as for the decision makers of the firms employed in the study.

scholarly journals An Analysis of the Performance of General Insurance Companies in India

2019 ◽  
Vol 8 (1) ◽  
pp. 20-27
Author(s):  
Soheli Ghose ◽  
Raman Kumar
Keyword(s):  
Insurance Industry ◽  
Secondary Data ◽  
Annual Reports ◽  
Insurance Companies ◽  
Insurance Sector ◽  
General Insurance ◽  
Growth Prospects ◽  
Rapid Pace ◽  
The Stability ◽  
Pro Forma

The General Insurance Industry in India is growing at a very rapid pace. This is an empirical research based on secondary data collected from Annual Reports and Pro-forma Schedules of IRDA. An Excel data Model was created to taken in the core figures of GWP, NEP, NP and others of 4 General Insurance Majors to calculate other relevant ratios as need for the analysis. The objectives of this study are to analyze a few General Insurance companies in India and core Ratios related to the Insurance Sector only and to comparatively analyse Retention ratio, Total Claims Incurred, Earned Incurred Loss Ratio, and Combined Ratio. The conclusion report has been framed on the basis of which company seems to be the best with respect to its Future Growth prospects, Risk prospects and the stability of its growing business. Out of the companies analyzed, TATA-AIG GENERAL INSURANCE has a good future prospect.

scholarly journals DETERMINANTS OF INTEREST RATE SPREAD AMONG COMMERCIAL BANKS IN KENYA

2017 ◽  
Vol 2 (5) ◽  
pp. 75
Author(s):  
Leah Njoroge ◽  
Dr.Chogii Dr.Chogii
Keyword(s):  
Interest Rate ◽  
Central Bank ◽  
Credit Risk ◽  
Significant Relationship ◽  
Commercial Banks ◽  
Regression Coefficient ◽  
Secondary Data ◽  
P Value ◽  
Unique Contribution ◽  
Interest Rate Spread

Purpose: This study sought to find the determinant of interest rate spread among commercial banks in Kenya.Methodology: The study used a descriptive research design. The target population of this study included all the commercial banks in Kenya since the small number of population called for a census survey of all the banks. The study used secondary data which includes the governments’ publications, journals, banking survey reports, annual reports of the Commercial banks in Kenya and periodicals. Quantitative data was collected. Secondary data used to calculate interest rate spread was collected from the annual statements of the sampled commercial banks. The study used both descriptive and inferential statistics. The descriptive statistics included trend analysis, mean and standard deviation. The study used a pooled OLS regression model to analyze the relationship between the independent and dependent variables.Results: The regression results indicate that there is a positive and significant relationship between market structure and interest spread. This finding was supported by a regression coefficient of 0.200 (p value = 0.000). The reported p value was less than the critical p value of 0.05. The results also indicated that there is a positive and significant relationship between credit risk and interest spread. This finding was supported by a regression coefficient of 0.096 (p value = 0.008). The reported p value was less than the critical p value of 0.05. This implies that an increase in credit risk by one unit would result to an increase in the interest spread by 0.096 units. Further, the results indicate that there is a positive but insignificant relationship between access to information and interest spread. The regression results also indicated that there is a negative and significant relationship between regulation and interest spread. This finding was supported by a regression coefficient of -1.309 (p value = 0.000). The reported p value was less than the critical p value of 0.05.Unique contribution to theory, practice and policy: The study recommended that commercial banks should be encouraged to use the information from the credit reference bureaus so as to maintain a lower interest spread among Commercial banks in Kenya. The study also recommended that the central  bank should licence more CRBs which would assist the commercial banks in lowering the credit risk. the study recommended that the central bank should review the monetary policy and lower the T- bill (91 days). This would help to lower the interest spread among Commercial banks in Kenya.

An Analysis of the Link between Water Infrastructure Financing and Water Provision South Africa

2018 ◽  
Vol 10 (3(J)) ◽  
pp. 74-83
Author(s):  
Lerato C. Bapela ◽  
Collins C. Ngwakwe ◽  
Mokoko P. Sebola
Keyword(s):  
South Africa ◽  
Quantitative Research ◽  
Secondary Data ◽  
P Value ◽  
Unique Contribution ◽  
Water Infrastructure ◽  
Control Variables ◽  
Policy Makers ◽  
Infrastructure Finance ◽  
Water Provision

This paper evaluated the relationship between water infrastructure financing and water provision in South Africa. The research followed a quantitative research design; secondary data for water infrastructure financing and water provision in South Africa was obtained from the Trans - Caledon Tunneling Agency (TCTA) and the World Bank for the period 1994 - 2014 . The regression results indicated two separate findings which offers unique contribution to the current literature; results from water asset finance as a single independent variable on water provision showed a significant relationship. However, an addition of two control variables , corruption and violence, neutralised the effectiveness of water asset finance on water provision to the extent that water asset finance became less significant with a P value of 0.05. The paper makes a nuance contribution from the findings, which specifically is that finance alone may not deliver target water provision if corruption and violence is left unbridled. The paper thus recommends the need for public policy makers to control the rate of corruption and violence to enable effective application of water infrastructure finance in water provision. The paper also recommends the need for further research on other government departments to integrate corruption and violence as control variables. 

scholarly journals Effects of Underwriting and Claims Management on Performance of Property and Casualty Insurance Companies in East Africa

2017 ◽  
Vol 13 (13) ◽  
pp. 358
Author(s):  
Caren B. Angima ◽  
Mirie Mwangi
Keyword(s):  
Financial Performance ◽  
East Africa ◽  
Management Practices ◽  
Linear Regression Analysis ◽  
Secondary Data ◽  
Multiple Linear Regression Analysis ◽  
Insurance Companies ◽  
Insurance Sector ◽  
General Insurance ◽  
Claims Management

The insurance sector plays an important role in service economy of any country by underwriting of risks inherent in most sectors thus providing a sense of peace to most economic entities. Performance of general insurance companies is expected to be related to various factors, including optimal underwriting and prompt and efficient claims management functions. This study investigated the effect of underwriting and claims management practices on the performance of general insurance firms in East Africa. The study employed multiple linear regression analysis using primary and secondary data collected from 82 general insurers in Kenya, Uganda and Tanzania. The findings show that there is a significant positive relationship between underwriting and claims management practices employed by the firms and non-financial performance, but the relationship with financial performance was insignificant. The implication is that a profit oriented insurance firm should embrace a claims function that is closely related with the underwriting and pricing of the firm’s portfolio for meaningful results. It is recommended that general insurance companies focus on other important factors besides underwriting and claims management order to improve overall financial performance.

scholarly journals EFFECT OF NEW INFORMATION FROM RIGHTS ISSUE ANNOUNCEMENT ON SHARE PRICES OF FIRM’S LISTED ON THE NAIROBI SECURITY EXCHANGE

2017 ◽  
Vol 1 (3) ◽  
pp. 54
Author(s):  
Batista J. Mariko ◽  
Theuri J. M
Keyword(s):  
Stock Returns ◽  
Secondary Data ◽  
Sampling Technique ◽  
Target Population ◽  
P Value ◽  
Unique Contribution ◽  
Share Prices ◽  
New Information ◽  
Rights Issue ◽  
The Impact

Purpose: The purpose of this study was to establish the effect of new information from rights issue announcement on share prices of firm’s listed on the Nairobi Security Exchange.Methodology: The study was carried out using descriptive research design. The target population consisted all companies listed on the NSE, and had previously done a rights issue. Convenient sampling technique was used to identify firms that had rights issue in the period under study.  Secondary data was collected using a schedule developed by the researcher. Data analysis was done using events study methodology and regression modelling.Results: Based on the findings the study found that mean share prices before and after the rights issue announcement was statistically insignificant as indicated by the t-test (t= -0.435 and p-value = 0.663).Unique contribution to theory, practice and policy: Based on the findings the study recommends that further studies to be done on the impact of bonus issues, IPOs, and the global economic crisis (2008-2009) on stock returns of companies listed at the NSE.

scholarly journals A Mixed Model for Loss Ratio Analysis

1991 ◽  
Vol 21 (2) ◽  
pp. 231-238 ◽  
Author(s):  
M. Y. El-Bassiouni
Keyword(s):  
Mixed Model ◽  
Structural Parameters ◽  
Maximum Likelihood Estimates ◽  
Insurance Companies ◽  
Ratio Analysis ◽  
Loss Ratio ◽  
Time Effects ◽  
General Insurance ◽  
Proposed Model ◽  
Ratio Data

AbstractThe model introduced may be treated as a mixed two-way analysis of variance with fixed company effects and random time effects. Further, the risk volumes are integrated into the model in such a way that the unexplained variance is inversely proportional to the risk volume of each company. The proposed model is used to analyze loss ratio data from the general insurance market in Kuwait. The maximum likelihood estimates of the structural parameters are obtained. These estimates are then used to compute the loss ratios and solvency margins for the four domestic insurance companies.

scholarly journals GOVERNMENT REGULATION AND SUSTAINABILITY OF KENYA’S INSURANCE COMPANIES

1970 ◽  
Vol 4 (1) ◽  
pp. 1
Author(s):  
Johannes Mwangangi Kitaka ◽  
Dr. David Kiragu ◽  
Prof. Simmy M. Marwa
Keyword(s):  
Data Collection ◽  
Customer Service ◽  
Government Regulation ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Insurance Companies ◽  
Primary Data ◽  
Measurement Tool ◽  
Unique Contribution ◽  
Validity And Reliability

Purpose: The study investigated government regulation and sustainability of Kenya’s insurance companies. Methodology: The study adopted the positivist research philosophy and employed a descriptive research design. The target population of the study was the 51 insurance companies registered by the Insurance Regulatory Authority (IRA) of Kenya as at 31st December 2016. The study took a proportionate sample of 30 companies from 10 life, 15 general and 5 composite companies. The primary data collection was through a structured questionnaire with closed questions. A pilot study was carried out before questionnaire distribution, which ensured the research instrument validity and reliability, before distribution through both hand delivery and email, followed by a telephone call to the respondents and a research assistant later visiting the respondents to collect the filled questionnaires. The raw data was cleaned, edited, coded and analyzed to generate descriptive statistics of ANOVA and T-test and inferential statistics of mean, standard deviation and frequencies,  while secondary data was collected using data collection sheets. Study Findings: The findings showed that there is a moderating effect of government regulation on drivers of sustainability of insurance companies in Kenya. While there was positive and significant effect of government regulation on capital adequacy, management capability and sensitivity to risk, government regulation had no moderation on asset quality as management of other variables of management quality, capital adequacy and risk sensitivity would address the quality of capital. Unique Contribution: The study recommends that IRA opens up the RBC measurement tool to bring in sustainability and management indices. Further, IRA should review regulation to support the insurance companies to enhance innovation and customer service delivery, which are key for growth, and sustainability of the various insurance companies in the country.

scholarly journals Measurement of Financial Soundness of Life Insurance Companies in Bangladesh: An Empirical Study

2021 ◽  
pp. 29-43
Author(s):  
Dr. Razu Ahmed
Keyword(s):  
Life Insurance ◽  
Stock Exchange ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Annual Reports ◽  
Insurance Companies ◽  
Financial Health ◽  
Financial Soundness ◽  
Depth Study ◽  
Z Scores

Purpose: The study strives to measure insurance companies’ financial soundness in Bangladesh with reference to private sector life insurance companies listed in the Dhaka Stock Exchange (DSE). Methods: CARAMELS ratio analysis and multiple discriminate analysis (MDA) have been employed to determine the results using secondary data sources collected from annual reports for ten-year DSE listed companies. Findings: The study identified a satisfactory capital adequacy ratio (CAR) with a decreasing trend. Reinsurance and actuarial ratio indicate that companies hardly participate in reinsurance. In most cases, all selected companies’ expense ratio during the study period is more than the standard (20 %) of the Insurance Development and Regulatory Authority (IDRA). All the selected insurance companies hold more liquid assets than the necessity. Z scores depicted that all the selected companies are potentially sick position in terms of financial health. Originality/Value: This study measured the financial soundness of life insurance companies in Bangladesh. No in-depth study was conducted in Bangladesh, particularly on measuring the financial soundness of life insurance companies.

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