Risk, technical efficiency and capital requirements of Ghanaian insurers

Daniel Attah-Kyei (), Charles Andoh () and Saint Kuttu
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Daniel Attah-Kyei: University of Ghana
Charles Andoh: University of Ghana

Risk Management, 2023, vol. 25, issue 4, No 1, 27 pages

Abstract: Abstract 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.

Keywords: Insurer's risk; Recapitalisation; Regulation; Technical efficiency (search for similar items in EconPapers)
JEL-codes: D81 G22 G32 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1057/s41283-023-00127-z

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