Modelling of educational policy to sustain reserves. A case study of State Insurance Company.

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June, 2016
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The Insurance Industry in Ghana has seen setbacks though situations after 1986 stabilized and many Insurance companies came into being. The entry into the market of many firms led to stiff competition which resulted in firms engaging in unethical malpractices. The firms in their operations registered poor performance over the years. The main objective of the study was to model one year educational plan for State Insurance Company (SIC) clients by estimating a reasonable premium to the full year for which the company can also earn profit after selling the product. Among the insurance companies in the country, SIC-Life insurance Company was purposively selected as a sample to represent Ghana’s Insurance sector. The study took the form of longitudinal and documentary review that included among others, financial, annual and other corporate documents. The study revealed that SIC-Life Insurance Company sells four life products under Universal Life policies namely; Family Security Plan, Flexi-Child Education Policy, Ultimate Life Plan and Education Plan. Annual premiums estimated for the policy at 6% interest rate using principles of equivalence indicated the company can keep enough reserves as compare with their current operations. Profit testing analysis was performed to arrive at 1.38% profit margin of the education plan. The study revealed that Insurance companies manage risk through a number of ways including re-insurance and co-insurance. It is recommended that Insurance companies should conform to the ethical conduct and statutory regulations and procedures if they are to succeed, including optimal premium ratings, sound investment policies and risk management processes.
A thesis submitted to the Institute of Distance Learning, Department of Mathematics, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Msc Actuarial Science