Theses and dissertations (Accounting and Informatics)
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Item Evaluation of operational efficiency and financial health of non-life insurance companies in South Africa(2023) Ige-Gbadeyan, Omonike Ope; Swanepoel, Matthys JohannesFor some time, operational efficiency has been a great challenge confronting insurance companies; the pressure of low investment returns, pressure to change to the digital age to be relevant to modern technology, and lack of performance to standard and strategic vision are the primary challenges to future transformation efforts. This study examined the operational efficiency and financial health of nonlife insurance in South Africa. Since Operational efficiency is the primary medium to measure financial health, there is a need to identify and discuss the microeconomics and macroeconomics variables and understand the financial health of non-life insurance companies. A descriptive research design was adopted to achieve the objective of this study. In this study, panel data from 2008- 2019 was used. This panel data gives more informative data as it consists of both the cross-sectional information, which captures individual inconsistency, and the time-series information, which captures active modification. 2008 was chosen because insurance industries were distressed due to the 2008. This study used secondary data from S&P Capitall Q and Refinitiv Eikon, well-known databases with readily available data. They provide data reliability, in-depth financial information on companies, equities, fixed income, industry reports, SEC filings, interest rates, commodities, and screening for stocks and mutual funds. The study employed Profitability TLA as a function of financial health and other variables like the company's size, leverage ratio, premium growth rate, liquidity, inflation rate, and Gross domestic product (GDP) growth rate using a panel data regression approach. The result shows that of all the predictors, only LY and LV have a significant (positive) effect on the dependent variable financial health (TLA). The correlation analysis results show the relationships between some of the observed parameters. In particular, the result reveals that liquidity, size of the company, leverage, profit After Tax, operational efficiency, and Return on Asset all have a significant positive correlation with financial health. At the same time, Total Assets correlate negatively with TLA. The study contribute insight into the operational efficiency of non-life insurance companies and show profitability as an efficiency index. The study recommends improving premium growth. Insurance management should focus on reviewing their product prices since some common factors can affect insurance premiums, like gender, age, smoking status, lifestyle, occupation, and income, to improve the premium growth of non-life insurance companies, this study will also be helpful to monitoring authorities in articulating comprehensive and practical strategies to ensure financial development and steadiness of the non-life insurance In the Republic of South Africa.