Insurance Sector Research Articles

Peculiarities of corporate control in insurance

Corporate control is one of the basic elements of effective corporate governance, the main purpose of which is to serve the internal objectives of the company and its internal stakeholders. The purpose of corporate control is to protect company assets by preventing errors and inappropriate actions by promoting policies, procedures and technical safeguards. The stable operation of the insurance sector is of major importance for economic and financial activity, which requires the creation of an internal control system within insurance companies capable of ensuring compliance with the regulations in force and corporate governance norms. The purpose of the conducted research was to present the particularities of internal corporate control within insurance companies. The objectives of the research were to study the essence of internal corporate control, as well as highlight its particularities within insurance companies.

Human Resource Accounting and Share Price Performance Evidence from Listed Insurance Firms in Nigeria

This study investigates the impact of Human Resource Accounting (HRA) on share price performance among listed insurance firms in Nigeria. Specifically, the study examines the effects of human capital efficiency, structural capital efficiency, capital employed efficiency, and the value-added intellectual capital coefficient (VAIC) on share price performance. This research adopts ex-post facto and descriptive research designs, utilizing data from 13 insurance firms listed on the Nigerian Exchange Group from 2012 to 2021. Random effect regression model was employed to address statistical issues ensuring robust results, after controlling for multicollinearity and heteroscedasticity. The findings reveal that human capital efficiency and capital employed efficiency significantly enhance share price performance, highlighting the importance of these factors in driving market valuation. Conversely, VAIC shows a significant negative impact on share price performance, suggesting that not all aspects of intellectual capital positively influence market outcomes in the insurance sector. These results contribute to a deeper understanding of how human resource investments affect financial performance, particularly in the context of emerging markets like Nigeria. Based on these findings, this study recommends among others that insurance firms should prioritize investments in human capital development through targeted training and continuous professional development. This approach will enhance employee productivity and innovation, which in turn would positively influence share price performance and contribute to the overall financial health and market competitiveness of the firm.

The Development of the Life Insurance Market in Central and Eastern European Countries

Motivation: The need to implement the process of economic transformation in the recent past is what significantly differentiates the countries of Central and Eastern Europe from other members of the European Union. Integration into the financial system of the European Union has been an important factor influencing the process of transformation of the life insurance sector and the establishment of the level of competition, as well as the quality and scope of insurance services offered. In addition, the improvement in the macroeconomic situation and the increase in household income have had a significant impact on the growth in demand for insurance products from the life insurance segment. Despite positive changes, the insurance market of Central and Eastern European countries remains a relatively underdeveloped market, and its structure, unlike that of Western European countries, is dominated by property insurance. This points towards a need for further research into the determinants of life insurance market growth in this region of Europe. Aim: The aim of this paper is twofold. The first part presents an assessment of the level of development of the life insurance market in ten countries of Central and Eastern Europe over the period 2011-2021 using the method of multivariate comparative analysis in dynamic terms. The second part of the paper is devoted to an attempt to identify the determinants of the development of this market using econometric models for panel data. Results: The life insurance market varies widely among the group of countries considered. The trends of change during the period under consideration were also different. The most severe downturn in the life insurance market was recorded in Poland and the Czech Republic. Significant development was observed in Lithuania and Latvia, countries with an underdeveloped market in the past. The econometric models used confirmed the impact of economic development on the life insurance market.

KAZAKHSTAN'S HEALTHCARE SYSTEM IN THE CONTEXT OF THE INTRODUCTION OF COMPULSORY SOCIAL HEALTH INSURANCE

This article is devoted to the analysis of the Kazakhstani healthcare system in the context of the implementation of the compulsory social health insurance system. It will examine issues related to healthcare costs, the degree of satisfaction of the population with health insurance, the quality of medical services, etc. Since its introduction in 2020, the healthcare insurance system in Kazakhstan has encountered significant challenges. These include public dissatisfaction with the quality of medical services, inadequate coverage of the population with health insurance, vulnerabilities in the insurance information system, the existence of medical supplements, underdeveloped infrastructure in rural areas, and information asymmetry in the health insurance sector. President of Kazakhstan, Kassym-Jomart Tokayev, criticized the reform process of the health insurance system and addressed these issues during a meeting with the Government on February 7, 2024. This article delves into the evolution of the Kazakhstan health insurance system by analyzing financial indicators and monitoring data. Through this analysis, problematic areas were identified, and practical recommendations were developed to optimize the compulsory social health insurance system. Various scientific methods were employed in this study, including institutional analysis, synthesis, literature review, comparative and contrastive, and sociological methods. The goal of this study is to provide recommendations for enhancing the healthcare system in Kazakhstan during the implementation of compulsory social health insurance. The empirical foundation of this study consists of legislative documents in the healthcare sector, official publications, and analytical and statistical reports from the Ministry of Health of the Republic of Kazakhstan. The hypothesis of the study is that the introduction of compulsory social health insurance in Kazakhstan is intended to promote positive changes in the healthcare system, but due to existing organizational and financial barriers does not improve the availability and quality of medical services. Keywords: health, health insurance, health care system, public administration, health care costs.

Enterprise Risk Management and Performance of Insurance Companies

Purpose: This research aims to investigate the impact of risk identification (RI), risk assessment (RA), risk mitigation (RM), and risk management (RMG) on institutional performance (IP). The objective is to analyze both individual and combined effects of these risk management practices on institutional outcomes.Methods: The study used descriptive and causal research design. The data were collected using structured questionnaire with five-point likert scale, targeting 151 managers, officers, and department heads from both life and non-life insurance sectors from Rupendehi district. The correlation analysis was used to examine the relationships between variables and Stepwise regression analysis to explore the effect.Results: It reveals that RA, RM and RMG had significant positive effect on institutional performance at individual level. When they are analyzed in single model RA and RM were only found significant. RI, while consistently positive, was found to be statistically insignificant across all models. RA and RM are significant variables of institutional performance, while RI and RMG play lesser roles.Conclusion: it is necessary to acquire deeper understanding on how risk management practices enhance institutional outcomes.

Capital Structure and Profitability of Non-Life Insurance Company in Nepal

Purpose: The study aims to find out the non-life insurance firms in Nepal that create profit using capital. The research closely examines several important factors like business size (Size), liquidity ratio (LQ), total debt to total assets (TDR) and equity to total assets (ETA).Methods: Secondary data were gathered from annual reports and financial statements of twelve non-life insurance firms in Nepal which provided basis for this descriptive and explanatory research design with quantitative research approach. This study used multiple regression analysis and Pearson correlation to find important impact and associations by SPSS data analysis.Results: Debt ratios and ROA and ROE have a negative association that implies too much leverage reduces profitability. Although lowering risk depends mostly on liquidity, it also lowers assets returns. This is seen by the liquidity ratio and it greatly reduces ROA but has little effect on ROE. The equity ratio reveals how difficult it is to deploy equity correctly with a strong negative connection with ROA and a great negative link with ROE. Further illustrating the advantages of economies of scale, organizational size positively links with returns on Assets (ROA). All academics, legislators and practitioners agree that the expansion and competitiveness of the insurance sector depend on a sound capital structure.Conclusion: According to the study, non-life insurance firms need to improve profitability by means of strategic capital structure management. Managers need to monitor whether the company has adequate liquidity and a good debt equity ratio or not if the company wants to improve overall financial success.

Analysis of financial contagion among economic sectors through Dynamic Bayesian Networks

Crises severely impact economies and may spread across regions or sectors in a process called contagion. Understanding this process is crucial for anticipating crises’ effects and implementing mitigative strategies. Specific economic sectors may be major crisis propagators: banking and insurance are often considered decisive in this context. This study employs Dynamic Bayesian Networks to model sectoral interdependencies within the U.S. economy, utilizing daily data from nine Dow Jones industrial indices over the period 2000–2020. As a secondary objective, we evaluate whether the insurance industry plays a central role in spreading crises. Several crisis periods are analyzed, from dot-com bubble to Covid-19 pandemic. The results reveal the subprime crisis, European debt crisis and the 2016 presidential election as the main contagious periods. The last analyzed period – Covid-19 pandemic – was divided in two phases, showing, on phase 1, an interconnected economic system with three main spreaders (Oil & Gas, Real Estate and Pharmaceutical) and, on phase 2, the same configuration of the post-subprime. Furthermore, although the insurance sector was somehow relevant during subprime crisis, it primarily acts as a contagion receptor, specially from the banking sector, with the correlation between them being the highest of all, reaching 0.49 at the last period.

Breaking Down Barriers: Preparing Africa's Insurance Market for AfCFTA Success

This article examines the regulatory challenges that affect the readiness of the African insurance sector for expansion and integration under the African Continental Free Trade Area (AfCFTA) framework. Employing a mixed-methods research design, the study integrates qualitative interviews with senior industry executives and quantitative survey data from key stakeholders to identify and evaluate the primary regulatory barriers impeding market preparedness. The analysis reveals several critical obstacles, including regulatory fragmentation, inconsistent enforcement of standards, and inadequate cross-border coordination. The findings suggest that addressing these challenges is crucial for realizing the full potential of AfCFTA in the insurance sector. The article concludes by providing strategic recommendations aimed at fostering regulatory coherence, enhancing market readiness, and supporting sustainable growth across Africa’s insurance markets.

A Baseline Study of Workaholism, Passion, and Environmental Mastery in the Social Insurance Sector for Military of State-Owned Enterprises (SOEs) in Indonesia

Working has become a routine for the majority of people worldwide, and workaholism remains a significant topic of discussion. Researchers suggest that workaholism has negative effects that can disrupt life outside of work. Individuals, especially Millennials and Gen Z, often channel their energy and passion into their work. In psychological studies, workaholism can be understood as obsessive work behavior through the concept of passion. Various studies have established a relationship between obsessive passion for work and workaholic behavior. Other studies indicate that individuals with workaholic tendencies tend to have low environmental mastery. This study examines the relationship between workaholism, passion, and environmental mastery. Among 217 employees from PT. XYZ's insurance sector, self-reports were collected using the DUWAS, Passion Scale, and Environmental Mastery scales. Participants included 123 (56%) men and 94 (43%) women. SEM was used to analyze the path between various dimensions. The results showed a significant positive relationship between Environmental Mastery (EM) and Harmonious Passion (HP) (p = 0.000), indicating that higher EM correlates with higher HP. A significant positive relationship was also found between EM and Obsessive Passion (OP) (p = 0.006). However, no significant relationship was found between HP and Working Compulsively (WC) (p = 0.607) or Working Excessively (WE) (p = 1.186). In contrast, OP showed significant positive relationships with both WC (p = 0.004) and WE (p = 0.004). This study is the first to explore these relationships and serves as a reference for intervention programs on workaholism.

Unraveling blockchain adoption in the insurance sector: a comprehensive TOE framework with knowledge management practices

Unraveling blockchain adoption in the insurance sector: a comprehensive TOE framework with knowledge management practices

Technology and service quality: achieving insurance industry customer satisfaction and loyalty under crisis conditions

PurposeThis research addresses the critical challenge of fostering customer loyalty within the highly competitive landscape of the insurance industry. The study investigates the interplay between customer satisfaction, loyalty, and the influence of technology and service quality in the context of insurance services and in periods of crisis.Design/methodology/approachA quantitative research approach was employed, utilizing a structured questionnaire distributed among diverse insurance customers in Lebanon during crisis conditions. The data were analyzed using SPSS-Amos, incorporating descriptive statistics, correlation analysis, and structural equation modeling (SEM).FindingsThis research emphasizes the crucial role of customer satisfaction in fostering loyalty in the insurance sector, especially during crises. High satisfaction levels, influenced by user-friendly online platforms, positively correlate with increased customer loyalty. Technology plays a vital role in maintaining and improving satisfaction, making it a key driver during challenging times. Positive interactions between service quality and satisfaction further highlight the multifaceted impact of technology on shaping customer loyalty.Practical implicationsThe research findings provide valuable insights with practical implications for insurers aiming to boost customer loyalty. The study recommends strategic investments in critical areas like claims processing, customer service, communication strategies, digitalization initiatives, and employee training. The study provides insights applicable particularly to insurance companies navigating crisis conditions.Originality/valueThis research contributes both to academic understanding and practical applications by shedding light on the distinctive challenges and opportunities faced by insurers in cultivating customer loyalty within the insurance industry during crisis. The elucidations provided serve as a foundation for developing targeted strategies to address these challenges and to leverage opportunities for enhanced customer loyalty.

Effect of age-related premium readjustment on health insurance cancellation in Brazil: Regression discontinuity approach.

Age is one of the most relevant observable risk attributes in determining the value of health insurance premiums. Empirical evidence indicates that the cost of health insurance is the leading cause of contract switching, which can compromise access to healthcare services and potentially result in treatment discontinuities. Using data from a Health Maintenance Organization in the Southern region of Brazil, we examined the effect of health plan price readjustment resulting from changes in the beneficiary's age group on disenrollment or switches to a more limited coverage plan. The estimates were obtained using the method of regression discontinuity. The main findings indicate that for age group transitions at 59years old, the price readjustment effect led to an increase in contract cancellations and switching to cheaper plans. These findings highlight that an important consequence of the difference in premium sensitivity among age groups is that the exit of individuals from the health insurance sector is selective in age. The results of this paper can support policymaking to improve access to health insurance.

Sustainability risk in insurance companies: A machine learning analysis

AbstractSustainable development constitutes a global challenge today, and the sustainable development goals (Agenda 2030) will probably set the course for the coming decades. This paper discusses sustainability in insurance companies by combining two aspects: a social approach (the environmental impact) and a business approach (the prediction of claims due to climate change). Our objective is to analyse the impact of physical risk in a home insurance portfolio and to measure in economic terms the effect of climate change in the future, by applying machine learning methodologies. Two data sources are used: a Spanish insurance portfolio with 31,998 policies and claims from 2017 to 2022, and daily meteorological variables from 290 Spanish weather stations from 2000 to 2022. Two climate scenarios are considered: RCP 4.5 (medium impact) and RCP 8.5 (high impact). On average for the period 2023–2052, the results reveal that claims will increase by 105% for the 4.5 scenario and by 129% for the 8.5 scenario. Our paper makes a clear contribution to sustainability by analysing climate risks and their impact on an insurance portfolio. It shows the grave consequences of climate change for the insurance sector's solvency and the political implications for the financial system in general.

Insurance sector challenges in the light of ESG. The case of Poland

Insurance sector challenges in the light of ESG. The case of Poland

A Time Series Study of Financial Sector Development and Original Sin in Nigeria

This study examined financial sector development and original sin in Nigeria financial market. Time series data was sourced from Central Bank of Nigeria Statistical Bulletin from 1990-2023. Original sin measured by Nigeria external debt per exchange rate, Capital market development as market capitalization to gross domestic product, Foreign exchange market as variation in naira exchange rate per US Dollar, banking sector development as percentage total bank assets to gross domestic product, money market development as insurance total assets to gross domestic product, Money market development as value of money market instrument to gross domestic product. The study employed descriptive statistics and multiple regression models to estimate the relationship that exists between the dependent and independent variables. The null Hypotheses (H0) were tested at 0.05 level of significance, Ordinary Least Square (OLS), Augmented Dickey Fuller Test, Johansen Co-integration test, normalized co-integrating equations and parsimonious vector error correction model were used to conduct the investigations and analysis. The study found that 57.0% variation on original sin can be traced and explained by variation on the independent variables as formulated in the regression model. However, the F-Statistics and the F-probability justifies that the model is significant and adequate in explaining variation on the dependent variable. The β coefficient shows that capital market development have negative effect on original sin, foreign exchange market have positive effect on original sin, banking sector development have negative effect on original sin, insurance sector development and money market development have positive effect on original sin. From the findings, the study concludes that the independent variables determine positively and negatively original sin in Nigeria. We recommend that the need for policies to deepen the capital market as this can cushion the effect of the negative effect of external borrowing and domiciled in Nigeria currency rather than international currency. There should be institutionalized policies to enhance the value of the naira against other international currencies as this can reduce the pressure of exchange rate variation in international debt and international monetary environment. Public expenditure should be directed to the productive sector of the economy as this can enhance the productive capacity of the economy and reduce the negative effect on balance of payment and other macroeconomic variables. Policies should be advanced to reduce external borrowings; this can reduce the debt burden and reduce the incidence of original sin in the financial market.

The Impact of Risk Management on the Financial Performance of the General Insurance Companies in Bangladesh

Objective: Proper risk management abilities are the keys to financial success of any company. The purpose of this study is to explore the relationship between risk management activities and the financial performance of listed general insurance firms in Bangladesh. Methodology: To investigate the impact, secondary data have been collected from the annual reports of the 42 insurance firms listed in the DSE for a five-year period (2017–2021). ROA, the depended variable has been used as a proxy of the financial performance, while risk management performance of the firms was analyzed using credit risk, market risk, operational risk, liquidity risk, underwriting risk, solvency risk management capacity of the companies separately and aggregately. Findings: The regression result shows that solvency risk management has significant positive impact on financial performance while credit risk, operational risk and underwriting risk management activities also have positive impact on firm performance. In addition, while the risk management has been considered in a holistic approach considering all the risk management tools in aggregate, the regression analysis reveals that comprehensive risk management initiatives show significantly positive effect on firm performance of insurance firms. Practical Implications: This study underscores the need for effective risk management strategies within companies to boost their financial results. Originality: Very few papers in Bangladesh have explored this area in Bangladesh specially in insurance sector. Findings of this study in the context of Bangladesh contribute to the literature gap and help the management to take necessary initiatives to improve performance. Limitations: Selecting short time period for analysis and using ROA as the only dependent variable for performance measurement are the major limitations of this study.

Socio-Demographic Determinants of Insurance Literacy among University Students in Indonesia

Introduction/Main Objectives: This research aims to investigate the level of insurance literacy among economics and business students and identify the socio-demographic factors impacting the level of insurance literacy. Background Problems: Low insurance literacy has long been identified as the cause behind the weak insurance penetration growth in Indonesia. College students area potential market for the development and deepening of the insurance sector. Novelty: However, hardly any studies have been published that assess the insurance literacy of university students in Indonesia. This study also presents a unique view of students’ insurance knowledge across different universities in Indonesia, providing an understanding of the factors contributing to their literacy level. Research Methods: We conduct the commonly applied ordinary least squares test on the survey data collected using stratified random sampling. Findings/Results: The test results conclude that students from universities in Java, who have mothers who graduated from college, come from middle-income families, and live in Java have significantly higher insurance literacy levels compared to the rest of the students. However, gender and residency do not seem to significantly impact insurance literacy. Conclusion: Our study shows that socio-demographic factors influence university students’ level of insurance literacy. These findings provide valuable information for policymakers and insurance firms to target this potential market with their insurance products.

The Impact of Procedural Justice on Employee Intention to Stay in Nepalese Insurance Companies: Exploring the Mediating Role of Affective Commitment

Procedural justice fosters the perceptions of fairness and support within the organization ensuring that all employees are treated equitably and transparently. It supports employees to stay a long term by creating a sense of fairness and trust in organizational processes, leading to higher job satisfaction and emotional commitment. This study examines the influence of procedural justice on intention to stay of employees within the Nepalese insurance companies, emphasizing the mediating role of affective commitment. To achieve the stated objective, data were collected from the primary source using a structured questionnaire administered through random sampling technique. The respondents comprised 298 employees of insurance companies working in different positions. The Smart PLS 4.0 was used to analyze the structural relationships within the proposed theoretical model. The findings of this study validated the set hypotheses that procedural justice has positive and significant effect on the intention to stay of the employees in Nepalese insurance sectors. The findings indicate that fair and transparent organizational procedures significantly enhance employees' emotional attachment to their companies, thereby increasing their intention to remain. By fostering perceptions of fairness, insurance companies can strengthen affective commitment, ultimately reducing turnover intentions and promoting long-term organizational stability. This research highlights the importance of procedural justice in retaining a committed and loyal workforce within the Nepalese insurance sector.

The Relationship between Activities of the Insurance Industry and Economic Growth: The Case of G-20 Economies

The aim of this study is to examine the impact of developments in the insurance sector on economic growth. This study examines an annual dataset spanning 1992 to 2022 from ten countries within the G-20 economies, for which data is reliably accessible. The analysis employs panel cointegration and panel causality tests to explore the underlying relationships. The results show that the activities of the overall insurance sector have a positive effect on economic development, while non-life insurance activities, as a sub-component of the insurance sector, also demonstrate a similar impact. Furthermore, findings indicate the existence of a bidirectional causality relationship between economic development and non-life insurance premiums. This study provides various recommendations to policymakers in the process of developing policies on the growth of national economies.

Does the ESG rating promote common prosperity within enterprises?

This article analyzes the effect of ESG ratings on fostering common prosperity within companies in China's capital market, focusing on non-financial and insurance sectors. The study finds that higher corporate ESG ratings significantly enhance common prosperity within firms, primarily by easing corporate debt financing constraints. Furthermore, the positive impact of ESG ratings on common prosperity is stronger in non-state-owned and larger enterprises. This research broadens the understanding of corporate ESG's role from a micro perspective and offers evidence on advancing common prosperity in the modern era.