Financial Performance of Insurance Firms. Does Leverage and Liquidity Matter? Evidence from Kenya

2021 ◽  
Vol 6 (1) ◽  
pp. 1-14
Author(s):  
Alex Maina Kamau ◽  
Tobias Olweny ◽  
Willy Mwangi Muturi
Keyword(s):  
Financial Performance ◽  
Insurance Firms

scholarly journals IMPACT OF DISRUPTIVE TECHNOLOGY ON THE PERFORMANCE OF INSURANCE FIRMS IN KENYA

2018 ◽  
Vol 3 (1) ◽  
pp. 72
Author(s):  
Ezekiel Owuor
Keyword(s):  
Big Data ◽  
Financial Performance ◽  
Data Analytics ◽  
Big Data Analytics ◽  
Disruptive Technology ◽  
Regulatory Body ◽  
Disruptive Technologies ◽  
Insurance Firms ◽  
Pdf Format ◽  
The Impact

Purpose:  The purpose of this paper was to explore the impact of disruptive technology on the performance of insurance firms in Kenya.Methods: The study utilized desktop literature review and focused on previously published journals in PDF format that address technology and the performance of insurance firms.  A total of 13 journals was found relating to technology and the performance of insurance firms. The study utilized a sample of 12 journals which were randomly selected from a list of published journals in PDF format relating to disruptive technology and performance of insurance firms. The theories underpinning of the study entailed Christensen's Theory of Disruptive Technology, the Diffusion of Innovation Theory and Schumpeterian Theory of Creative Destruction.Results: The review of literature revealed that various aspects of disruptive technology have a significant impact on organizational performance. The review showed that mobile phone technology has a significant influence and explains to a large extent the growth of micro insurance in Kenya. It was also found that the increase in industrial convergence, technological innovation and social digital trends increases the financial performance of financial institutions including insurance firms. The study also established that there is a strong and positive relationship between insurance innovation strategies and a firm’s performance. In addition, it was found out that real-time business evaluation through big data analytics boosts overall performance and profitability, thus thrusting the organization further into the growth cycle.Unique Contribution to theory, practice and policy: The leadership and management of insurance companies should put greater emphasis on the adoption of disruptive technologies to improve on both financial and non-financial performance as well as their competitiveness within the industry. These include Big Data, Analytics, Artificial Intelligence Systems, Cloud Computing and Digital Currency Technologies. Processes in the organizations should be refined to ensure that they are efficient and effective as this serves to increase market share and to reduce on operational costs. Moreover, explorations in disruptive technology should continue in the insurance industry as these would play a significant role in ensuring that efficiencies and effectiveness of business processes are achieved. The Insurance Regulatory Authority (IRA) should also develop policies that encourage innovation and the adoption of technology. The authority whilst exercising due diligence in its mandate to protect consumers should ensure policies do not stifle the growth and creativity of insurers. The regulatory body should also strive to create a favourable environment for the adoption of disruptive technologies.

scholarly journals Effect of gender diversity on the financial performance of insurance firms in Kenya

2019 ◽  
Vol 8 (5) ◽  
pp. 274-285
Author(s):  
Hassan Bashir Ibrahim ◽  
Caren Ouma ◽  
Jeremiah N. Koshal
Keyword(s):  
Financial Performance ◽  
Chief Executive Officers ◽  
Audit Committee ◽  
Gender Diversity ◽  
Secondary Data ◽  
Chief Executive ◽  
Primary Data ◽  
Financial Reports ◽  
Insurance Firms ◽  
Executive Officers

The aim of this study was to examine the effect of gender diversity on the financial performance of insurance firms in Kenya. The study analyzed data from the 55 insurance firms licensed by the Insurance Regularity Authority (IRA) in Kenya. Gender diversity was operationalized by the number of female directors serving on the boards of insurance firms operating in Kenya. Primary data was collected from a sample of 412 board directors, Chief Executive Officers (CEOs), Chief Finance Officers (CFOs), Audit Committee members (AUDIND) and Internal Auditorsusing a questionnaire instrument while secondary data was retrieved from audited financial reports of the year 2017. Data were analyzed using descriptive and inferential statistics. Firm performance was measured by the two accounting-based measures Return On Assets (ROA) and Return On Equity (ROE). The findings from the regression analysis indicate that gender diversity significantly and positively affects the financial performance of insurance firms in Kenya.

scholarly journals Determinants of Financial Performance of Insurance Companies: Empirical Evidence Using Kenyan Data

2021 ◽  
Vol 14 (12) ◽  
pp. 566
Author(s):  
Kamanda Morara ◽  
Athenia Bongani Sibindi
Keyword(s):  
Financial Performance ◽  
Fixed Effects ◽  
Insurance Industry ◽  
Insurance Companies ◽  
Random Effects Models ◽  
Insurance Sector ◽  
Life Insurers ◽  
Insurance Firms ◽  
Financial Performance Measures ◽  
The Government

The drivers of financial success of the insurance industry are of interest to several players in any economy including the government; policymakers; policyholders; and investors. In Kenya; there have been relatively few studies on this topic; most of which look at narrow elements that determine insurance companies’ performance. This article sought to explore the components contributing to the financial performance of insurance firms. We employed a sample consisting of 37 general insurers and 16 life insurers for the period running from 2009 to 2018 and utilised panel data methods in order to establish the determinants of financial performance of Kenyan insurers. The pooled OLS; fixed effects and random effects models were estimated with the financial performance measures (proxied by either ROA or ROE) as the dependent variables. The results of the study documented that insurer financial performance and size were positively related. The study also found that insurer financial performance was negatively related to the age variable. The study also unraveled that higher leveraged insurance companies performed better than their lowly geared peers. This article provides broad analyses of the various drivers of financial performance of the insurance industry in Kenya. The findings of this study contribute to the academic literature on the financial performance of the insurance sector in Kenya and Africa as a whole. Furthermore; it gives pointers to the management of insurance companies on the aspects of their business that would need greater attention to drive and sustain superior financial performance.

scholarly journals Actuarial Risk Management Practices, Underwriting Risk and Performance of P & C Insurance Firms in East Africa

2017 ◽  
Vol 13 (22) ◽  
pp. 207
Author(s):  
Caren B. Angima ◽  
Mirie Mwangi ◽  
Erasmus Kaijage ◽  
Martin Ogutu
Keyword(s):  
Risk Management ◽  
Financial Performance ◽  
East Africa ◽  
Management Practices ◽  
Ripple Effect ◽  
Loss Ratio ◽  
Insurance Firms ◽  
Actuarial Risk ◽  
And Performance ◽  
The Relationship

The purpose of the study was to establish the intervening effect of underwriting risk (loss ratio) on the relationship between actuarial risk management practices (ARMP) and performance of property and casualty (P & C) insurance underwriters in East Africa. Findings from primary and secondary data gathered from 82 general insurers from Kenya, Uganda and Tanzania show that there is a significant positive relationship between ARMP and non-financial performance and that loss ratio significantly mediates this relationship. The relationship with financial performance was however insignificant. The implication is that P & C insurance firms should keenly watch their loss ratios in order to improve their non-financial performance by correctly underwriting, pricing and reinsuring their risks in order to influence their claims ratio and also have a strategic claims management program in place that controls costs and leads to better firm reputation, which in turn will have ripple effect in increasing business volumes and performance. It is recommended that further empirical studies be carried out to establish other factors that especially influence financial performance.

scholarly journals ANALYSIS OF CAPITAL STRUCTURE AND FINANCIAL PERFORMANCE IN THE JORDANIAN INSURANCE SECTOR

2020 ◽  
Vol 8 (3) ◽  
pp. 1310-1320
Author(s):  
Zelhuda Shamsuddin ◽  
Al Majali Muhammad Ahmad Kamel ◽  
Wan Mohd Nazri Wan Daud ◽  
Wan Sallha Yusoff
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Insurance Companies ◽  
Tobin’S Q ◽  
Short Term ◽  
Equity Financing ◽  
Tobin's Q ◽  
Return On Equity ◽  
Insurance Firms ◽  
The Impact

Purpose of the study: This paper aims to examine the impact of capital structure and financial performance of listed insurance companies in Jordon. Methodology: This study used secondary data that was collected from Amman stock exchange and annual report of the selected insurance companies from the year 2007-2017. The static panel data analysis technique is used to examine the impact of capital structure on firm’s performance. The capital structure is measured using short-term debt, long-term debt, and equity financing. Whereas financial performance is measured using Return on Asset (ROA), Return on equity (ROE), and Tobin’s Q. Main Findings: The study findings suggest that capital structure influence the profitability of the listed insurance firms in Jordan. The results also reveal a significantly positive relation between long-term debt to total assets to profitability indicators, namely, return on assets (ROA), return on equity (ROE) and Tobin’s Q. On the other hand, the results also reveal a short-term debt has a significant positive relationship with return on equity (ROE) and returns on assets (ROA). However, a relationship between short-term debt and Tobin’s Q is not statistically significant. Applications of this study: The result of this study may assist the insurance sector in Jordon in making decisions regarding capital structure, which is to significantly rely on equity financing or debt financing to reduce financing risk such as agency cost that borne by the equity holders of the Jordanian insurance firms. Novelty/Originality of this study: The study noted that insurance firms generally play a crucial role in the economic development of every country. This study provides evidence that Jordanian insurance firms need to diversify their sources of financing and not rely significantly on debt financing, as the results prove that equity financing is a profitable source of financing.

THE RELATIONSHIPS BETWEEN THE FINANCIAL HEALTH AND FINANCIAL PERFORMANCE OF LIFE INSURANCE FIRMS: AN EMPIRICAL EVIDENCE FROM INDONESIA

2019 ◽  
Vol 24 (3) ◽  
pp. 215-224
Author(s):  
Toto Sugiharto ◽  
Novita Sulistiowati ◽  
Rina Nofiyanti
Keyword(s):  
Regression Analysis ◽  
Financial Performance ◽  
Life Insurance ◽  
Secondary Data ◽  
Financial Health ◽  
Return On Assets ◽  
Health Measures ◽  
Panel Data Regression ◽  
Data Regression ◽  
Insurance Firms

Financial performance is of importance for life insurance firms. It is affected by various factors including financial health which is measured by risk-based capital, technical reserve and equity. The study aims at analyzing the effect of these financial health measures on the financial performance of life insurance firms. Secondary data which include financial performance (i.e., return on assets), risk-based capital, technical reserve and equity of thirty three life insurance firms for the periods of 2011-2016 was used. Panel data regression analysis was performed to analyze the obtained data. Financial performance was affected by risk-based capital, technical reserves and equity in different directions. Financial performance of life insurance firms increases with low risk-based capital and technical reserves, but decreases with high equity.

Efficiency Analysis of the U.S. Publicly Held Insurance Industry

2018 ◽  
Vol 10 (1) ◽  
pp. 1-15 ◽  
Author(s):  
Mary Kay Copeland ◽  
Emilyn Cabanda
Keyword(s):  
Financial Performance ◽  
Insurance Industry ◽  
Efficiency Analysis ◽  
Data Envelopment ◽  
Tobit Regression ◽  
New Findings ◽  
The Us ◽  
Level 3 ◽  
Insurance Firms ◽  
Tobit Regression Model

This paper aims to measure and analyze the efficiency of the US publicly-held insurance industry from 2011 to 2013. The paper uses a two-stage efficiency model: (1) data envelopment analysis (DEA), a non-parametric model for measuring the efficiency of 141 panel data of US publicly-held insurance firms, and (2) stochastic Tobit regression model for determining associations between insurers' financial performance and efficiency. Three significant findings are obtained: (1) There is no evidence that US insurance firms consistently improve in efficiency over time using the input-output mix. (2) There is an overall positive significant association between insurers' financial performance and technical efficiency at a very high confidence level. (3) Type of insurance is found to have a negative and significant effect on efficiency. These new findings add empirical evidence to the efficiency analysis of the US insurance industry.

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