Underwriting Capacity and Income of Insurance Companies: (A Case of Nigeria) (original) (raw)
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Underwriting Capacity and Financial Performance on Non-Life Insurance Companies in Nigeria
Academic Journal of Economic Studies, 2020
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Zenodo (CERN European Organization for Nuclear Research), 2022
The financial performance of Nigerian insurance firms has been seen as weak and poor. Owing to the weakness of the insurance sector, the study therefore examined the effect of insurance specific attributes on financial performance of listed insurance firms in Nigeria. The study covered a period of eleven years from 2008 to 2018. The research used correlation research design and secondary data obtained from the annual reports and accounts of firms from 2008-2018. The population of the study is all the 27 insurance firms listed on the Nigerian Stock Exchange as at 31 st December 2018, eighteen (18) of these firms were selected as sample. Multiple regression analysis was used in estimating the research model. The result of the study shows that underwriting risk and operating expenses have negative and significant impacts on financial performance and Premium growth reveal a positive and significant impact on financial performance of the study firms. The study concludes that underwriting risk and operating expenses inversely affect the financial performance of listed insurance firms. The study recommends among others that the management of the listed insurance firm should focus more on reducing the level of their underwriting operation and cut their present level of operational cost drastically to improve financial performance.
2018
Ethiopia's insurance industry is one of the least developed in the world based on the commonly used measurements, penetration rate and density. Many factors may have contributed to this stagnation. It is commonly anticipated that the performance and profitability of insurance industry is the result of its underwriting performance and efficient investment portfolio management. But for companies in Ethiopia it is claimed that neither is doing well, especially their trend of high dependence on interest income in recent years, is putting the prospect of the sector in jeopardy. The purpose of this study is therefore to investigate the effects of underwriting profit and investment income on profitability of Ethiopia's private Insurance market. The study conducted on all private insurance companies in the industry who operate on non-life insurance and who have also been operating at least for full five budget years until 30th of June, 2017. Quantitative research technique has been ...
Insurance Specific Risk and Profitability: Evidence from Nigerian Insurance Firms
International Journal of Accounting, Finance and Risk Management, 2020
Insurance firms assume different types of business-specific risks that affect financial operations. The study therefore investigates the effect of these insurance specific risks on profitability in Nigeria over the 10-year period (2009-2018) with a sample size of 19 firms. Three variables, such as Re-insurance, Technical Provisions and Underwriting Risks, have been used as a measure of insurance specific risk for independent variables. The net profit margin was used as a measure of profitability for the dependent variable. The study is based on the Ex-Post Facto Research Design, which uses data already collected for the study. The study used secondary data from their annual reports. The results of the fixed effect regression model showed that the technical provision and the underwriting ricks had a negative and significant impact on profitability, while the re-insurance risk had a negative and insignificant impact on profitability. The study concludes that an increase in technical provision and risk underwriting will lead to a poor profitability of the insurance companies listed in Nigeria. The study recommends that insurance companies in Nigeria should make sufficient provision for outstanding claims by conducting an adequate assessment of their liabilities and also taking into account past experience to develop a comprehensive procedure for effectively monitoring and controlling their outstanding claims.
Predictors of Profitability in the Nigerian Insurance Industry
CERN European Organization for Nuclear Research - Zenodo, 2022
This study examined the predictors of profitability in Nigeria Insurance Industry between 2011 and 2020. It looked into the effect of financial leverage, solvency margin, financial liquidity and risk underwriting on Profitability of insurance industry in Nigeria. In the study, descriptive research design was employed with the population of thirteen (N=13) composite insurers from which a sample of six (n=6) were randomly selected. Four hypotheses were tested using e-view. Findings showed that SOVEREIGN TRUST plc has the highest ROE with mean value of 0.058489 followed by LEADWAY Insurance Plc with 0.043822 mean value on ROE. Mutual Benefit plc covers 0.038811 and PRESTIGE insurance has ROE of 0.028478. LASACO Assurance Plc with 0.025744 while Cornerstone plc has the lowest mean value on ROE: 0.0112 in the distribution. Thus it is evident that SOVEREIGN TRUST plc and LEADWAY Insurance Plc are the leaders in the Nigerian Insurance industry for the period, with positive effect of financial leverage, solvency margin, financial liquidity and risk underwriting on profitability of the insurance companies in Nigeria. The study therefore concluded that there is statistically significant relationship between the four independent variables (financial liquidity, solvency margin, risk underwriting and financial leverage) on the dependent variable , profitability, proxied by return on equity of insurance companies in Nigeria. The study recommended that stakeholders in the Nigerian insurance industry in collaboration with their regulatory body; National Insurance Commission (NAICOM), should maximize the contributions of the various predictors of profitability in the composite insurance industry across the nation.
Management Research Studies Journal, 2022
This study was conducted to test the effect of premium income, underwriting ratio, return on investment and return on equity on profit of insurance company.xThexmethod applied in this study was quantitative method. The population included the general insurance companies registered at Indonesia Stock Exchange in 2015-2019.xThexsamples of this study were 10 insurance companies selected using purposive sampling technique.xThextypesxof data used on this study was secondary data. The method of data collection applied was documentation method and the technique of data analysis applied was multiple linear regression with a significance level of five percent. The results of the analysis showed that: (1) premium income had positive significant effect on insurance profit, (2) underwriting ratio had positive significant effect on insurance profit, (3) return on investment had positive significant effect on insurance profit, (4) return on equity had no significant and negative effect on insurance profit.
43 | P a g e DETERMINANTS OF PROFITABILITY OF INSURANCE FIRMS IN GHANA
2015
The general objective of the study is to find out the determinants of the profitability of insurance firms in Ghana. Secondary data on financial reports were collected from sixteen insurance firms in Ghana for the period 2005 to 2010.The study was quantitative in nature. It adopted the longitudinal time dimension, specifically, the panel method and ordinary least square regression. The study discovered that, apart from tangibility which has a negative relationship, there is a positive relationship between leverage, liquidity and profitability of insurance firms in Ghana. It was also concluded that, the profitability model adopted has been explained in respect to all the independent variables and that the degree of error is less than 20%. Finally, it is suggested that the explanatory variables used in this study should be regressed on Return on Equity to find their extent of relationship on profitability.
Determinants of Financial Performance of Insurance Companies in Ethiopia
2019
The insurance sector plays important role in contributing to economic growth, efficient resourceallocation, reduction of transaction costs, creation of liquidity, facilitation of economic of scalein investment, and spread of financial losses. Financial performance is the most importantindicator of good financial management as the objective of financial management is to maximizeorganization’s earnings measured by profitability. This study investigated the determinants offinancial performance of insurance companies in Ethiopia based on Secondary data obtainedfrom financial statement of nine insurance companies for eleven years, 2006 to 2016 statementsand balance sheet of insurance companies from NBE. The Method of Data analysis used in thisstudy is correlation and multiple regression analysis. The findings of the study indicate thatunderwriting risk have statistically significant and negative impact on insurers financialperformance and also indicates that there is a positive relations...
DETERMINANTS OF PROFITABILITY OF INSURANCE FIRMS IN GHANA
The general objective of the study is to find out the determinants of the profitability of insurance firms in Ghana. Secondary data on financial reports were collected from sixteen insurance firms in Ghana for the period 2005 to 2010.The study was quantitative in nature. It adopted the longitudinal time dimension, specifically, the panel method and ordinary least square regression. The study discovered that, apart from tangibility which has a negative relationship, there is a positive relationship between leverage, liquidity and profitability of insurance firms in Ghana. It was also concluded that, the profitability model adopted has been explained in respect to all the independent variables and that the degree of error is less than 20%. Finally, it is suggested that the explanatory variables used in this study should be regressed on Return on Equity to find their extent of relationship on profitability. Keywords: Determinants, Profitability (Return on Assets), leverage, liquidity and Tangibility.
Factor Affecting Insurance Companies Profitability in Ethiopia
Background: The performance of any firm not only plays the role to increase the market value of that specific firm but also leads towards the growth of the whole industry which ultimately leads towards the overall prosperity of the economy. The aim of this study was determining factor that affect profitability of Insurance Company in Ethiopia. Methodology: The sample in this study includes 5 years data from 2012 to 2016 which is secondary data obtained from the financial statements (Balance sheet and Profit/Loss account) of Insurance Companies in Ethiopia are analyzed. To comply with the objective of this research, the authors are primarily used based on quantitative research, which constructed an econometrics model to identify and measure the determinants of profitability.Results: The average and standard deviation for profitability of insurance company measured by using Return on assets (ROA) for Ethiopian insurance companies was 0.117 and 0.08, respectively. In the univariable an...