This
study investigates the effect of firm-specific factors on the profitability of
non-life insurance companies operating in Uganda to be more specific, to
examine the relationship between profitability and economic factors, firm size,
underwriting factor. For this purpose, secondary
data of 21 non-life insurance companies operating in Uganda from the period
2004–2015 were collected from IRA. The data was analyzed using descriptive
statistics, coefficient of determination (R2), standard error test, and test of
correlation (T), multiple linear regression. In this study, profitability is
measured by profit before tax. The
independent variables used are net premium amount, expense ratio, net claims
amount, retention ratio, reinsurance ratio, economic growth rate and inflation
rate. According to the empirical
results, variables that significantly predict profitability of non-life
insurance companies are market
size of the company, premium amount, penetration rate, firm size and inflation
rate at 5% and 10% level of significance whereas profitability is statistically
significant and negatively related to the company’s expense ratio at 10%
significance level. However, reinsurance ratio and the premium retention ratio
are not found to be important explanatory variables. The policy implications of
this study for the stakeholders of the insurance industry are numerous.
Insurers should pay due attention to their underwriting activities to ensure
objective risk selection and management. In addition, insurers need to invest
more on human capital development and staff motivation as these enhance
productivity and subsequently profitability.
TABLE OF CONTENTS
1.6.
SIGNIFICANCE OF THE STUDY
CHAPTER
TWO: LITERATURE REVIEW
CHAPTER
THREE: RESEARCH METHODOLOGY
CHAPTER
FOUR: DATA ANALYSIS AND INTERPRETATION OF
RESULTS
4.2.1 CHECKING FOR
MULTICOLLINEARITY
4.2.2 CHECKING FOR NORMALITY OF
RESIDUALS
4.2.3. CHECKING FOR
HOMOSCEDASTICITY
CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS
AINEBYOONA, B (2018). EFFECTS OF FIRM SPECIFIC FACTORS ON NON-LIFE INSURANCE COMPANIES’ PROFITABILITY IN UGANDA; A CASE STUDY OF UGANDA INSURANCE MARKET. Afribary.com: Retrieved March 04, 2021, from https://afribary.com/works/effects-of-firm-specific-factors-on-non-life-insurance-companies-profitability-in-uganda-a-case-study-of-uganda-insurance-market
Bruno, AINEBYOONA. "EFFECTS OF FIRM SPECIFIC FACTORS ON NON-LIFE INSURANCE COMPANIES’ PROFITABILITY IN UGANDA; A CASE STUDY OF UGANDA INSURANCE MARKET" Afribary.com. Afribary.com, 19 Dec. 2018, https://afribary.com/works/effects-of-firm-specific-factors-on-non-life-insurance-companies-profitability-in-uganda-a-case-study-of-uganda-insurance-market . Accessed 04 Mar. 2021.
Bruno, AINEBYOONA. "EFFECTS OF FIRM SPECIFIC FACTORS ON NON-LIFE INSURANCE COMPANIES’ PROFITABILITY IN UGANDA; A CASE STUDY OF UGANDA INSURANCE MARKET". Afribary.com, Afribary.com, 19 Dec. 2018. Web. 04 Mar. 2021. < https://afribary.com/works/effects-of-firm-specific-factors-on-non-life-insurance-companies-profitability-in-uganda-a-case-study-of-uganda-insurance-market >.
Bruno, AINEBYOONA. "EFFECTS OF FIRM SPECIFIC FACTORS ON NON-LIFE INSURANCE COMPANIES’ PROFITABILITY IN UGANDA; A CASE STUDY OF UGANDA INSURANCE MARKET" Afribary.com (2018). Accessed March 04, 2021. https://afribary.com/works/effects-of-firm-specific-factors-on-non-life-insurance-companies-profitability-in-uganda-a-case-study-of-uganda-insurance-market