Risk, technical efficiency and capital requirements of Ghanaian insurers

Risk Management - Tập 25 - Trang 1-27 - 2023
Daniel Attah-Kyei1, Charles Andoh1, Saint Kuttu1
1Department of Finance, University of Ghana Business School, University of Ghana, Accra, Ghana

Tóm tắt

This paper evaluates the effect of recapitalisation on technical efficiency and risk of life and non-life insurers in Ghana. The study uses balanced panel data for 14 life and 17 non-life insurers from 2008 to 2019. Technical efficiency is computed using Data Envelopment Analysis. A generalised least square estimation technique is used to determine the relationship between recapitalisation and technical efficiency and between recapitalisation and insurers’ risk. The empirical results show that recapitalisation has a significant positive effect on technical efficiency and a significant negative effect on the insurer’s risk. The findings also suggest that recapitalisation significantly mitigates risks and improves efficiency. The findings further provide insight into technical efficiency, regulation, and risk of insurance companies in Ghana.

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Risk Management

Tập 25

1-27

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