Claim Management of Non-Life Insurance Companies in Ghana: Does It Impact on Profitability?

Abstract

This study seeks to interrogate the impact of claim management on the profitability of non-life insurance companies in Ghana covering the years 2013-2020. The study employs the fixed effects and random effects techniques with data covering the period 2013-2020. Hausman test is used as an appropriate approach to conduct this study. Our work measured profitability utilizing interpretive financial tools such as return on assets (ROA) and returns on equity (ROE). The results of our research indicates that claim ratio and retention ratio have a profound adverse impact on return on asset. In terms of return on equity (ROE), claim ratio and expense ratio negatively and significantly affect profitability. This study recommends that non-life insurance companies should institute an effective claim processing system with highly qualified, experienced, trained and technical staff to ensure efficiency in claims management.