ASSESSING THE IMPACT OF RISK BASED INSURANCE SUPERVISION METHODOLOGY ON NON-LIFE INSURANCE COMPANIES IN GHANA

ABSTRACT

The purpose of this research is to evaluate how the inception of risk based supervisory approach has influenced the solvency positions of insurers in Ghana. The study considered 20 General Insurance Companies from 2008 – 2018. The main objectives of the study were to generate credibility risk premium values for individual claim experience to be used as an average premium regulator and develop Performance ratio thresholds for the Insurance Industry in Ghana using credibility theories and lastly determine whether the introduction of RBS approach has caused a shift in the solvency position of Non – Life Insurance. Credibility models such as the Buhlmann Straub‟s Credibility theory and its components were used to test the researcher‟s objectives and the results showed that, Claim Counts for General Insurers reveals that, Ghana Union Assurance recorded the highest average of 76.3 claim count and a maximum of 154 claim count. Prime Insurance Company Limited recorded as low as 3.0 average claim count. Ghana Union Assurance recorded the highest average of 937.36 policy count and a maximum of 1896 policy count. Priority Insurance Company Limited recorded as low as 25.00 average policy count. The results showed that expected process variance (EPV) was whiles the variance of the hypothetical mean (VHM) was . It was also realized that the expected process variance (EPV) was whiles the variance of the hypothetical mean (VHM) was and the variance of the hypothetical means (VHP) was . It is recommended that Gross Written Premium is the only performance ratio that recorded a significance credibility weight (54%) on the Ghanaian industry average.