Risk Management Practices and Their Impact on Financial Performance of Life and Non-Life Insurance Firms; Evidence from South Africa.
Publication Date: 26/12/2025
Author(s): Divine Bisongonu Fondem (Ph.D.).
Volume/Issue: Volume 8, Issue 5 (2025)
Page No: 95-111
Journal: African Journal of Economics and Sustainable Development (AJESD)
Abstract:
The purpose of this study is to examine the extent of the relationship between Risk Management (RM) practices and Financial Performance FP in the life insurance (LI) and Non-life insurance (NLI) companies in South Africa from 2018 to 2024. Secondary data computed from the annual balance sheet statements were constructed in a Panel data framework and applied OLS and Fixed Effect regression models. The results reveal that CR is a positive and significant relationship with the ROA of the LI and NLI firms in SA, indicating a possible risk transfer mechanism to other financial institutions. While the OP, LI, CR, and MR have positive but insignificant relationships with ROE, future studies should consider increasing the sample size to enhance the generalizability of the findings.
Keywords:
Life and non-life insurance companies, financial management, financial performance, longitudinal and cross-sectional panel data analysis.
