Determinants of financial performance of life and non-life insurance companies in Ghana
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Date
2021
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KNUST
Abstract
This study examines the determinants of financial performance of the insurance industry in Ghana. The study employs annual financial data from 2012 to 2016 from ten insurance companies which underwrite all types of business policies in both life and non-life insurance. The study employs Random and Fixed effect regression analysis to predict the effect of the predictive variables on the financial performance of life and non-life insurance companies in Ghana. The study finds evidence that tangibility, size, leverage, gross written premium (GWP) and liquidity of both life and non-life insurance companies are the predictors of their profitability suggesting that a rise in any of these predictive variables can have substantial influence on the profitability of the Ghanaian insurance companies employed in the study. The results revealed positive and significant relationship between tangibility and profitability of both life and non-life insurance companies. The findings also showed a positive and significant relationship between life and non-life insurance companies’ size and return on assets. The results showed positive and statistically significant relationship between gross written premium (GWP) and profitability (return on assets, ROA) of both life and non-life insurance companies. The findings also show positive and significant relationship between liquidity and profitability of both life and non-life insurance companies. The results however revealed a negative and significant relationship between life and non-life insurance companies’ leverage ratio and financial performance (return on assets).
Description
A thesis submitted to the department of accounting and finance, school of business, Kwame Nkrumah university of science and technology in partial fulfilment of the requirements for the award of the degree of master of business administration in finance