Sylvester Senyo Horvey, Jones Odei-Mensah, Albert Mushai
{"title":"南非人寿保险公司盈利能力的决定因素：来自动态面板阈值估计技术的新证据","authors":"Sylvester Senyo Horvey, Jones Odei-Mensah, Albert Mushai","doi":"10.1108/ijoem-08-2022-1225","DOIUrl":null,"url":null,"abstract":"<h3>Purpose</h3>\n<p>Insurance companies play a significant role in every economy; hence, it is essential to investigate and understand the factors that propel their profitability. Unlike previous studies that present a linear relationship, this study provides initial evidence by exploring the non-linear impacts of the determinants of profitability amongst life insurers in South Africa.</p><!--/ Abstract__block -->\n<h3>Design/methodology/approach</h3>\n<p>The study uses a panel dataset of 62 life insurers in South Africa, covering 2013–2019. The generalised method of moments and the dynamic panel threshold estimation technique were used to estimate the relationship.</p><!--/ Abstract__block -->\n<h3>Findings</h3>\n<p>The empirical results from the direct relationship reveal that investment income and solvency significantly predict life insurance companies' profitability. On the other hand, underwriting risk, reinsurance and size reduce profitability. Further, the dynamic panel threshold analysis confirms non-linearities in the relationships. The results show that insurance size, investment income and solvency promote profitability beyond a threshold level, implying a propelling effect on life insurers' profitability at higher levels. Below the threshold, these factors have an adverse effect. The study further points to underwriting risk, reinsurance and leverage having a reduced effect on life insurers' profitability when they fall above the threshold level.</p><!--/ Abstract__block -->\n<h3>Practical implications</h3>\n<p>The findings suggest that insurers interested in boosting their profit position must commit more resources to maintain their solvency and manage their assets and returns on investment. The study further recommends that effective control of underwriting risk is critical to the profitability of the life insurance industry.</p><!--/ Abstract__block -->\n<h3>Originality/value</h3>\n<p>The study contributes to the literature by providing first-time evidence on the determinants of life insurance companies' profitability by way of exploring threshold effects in South Africa.</p><!--/ Abstract__block -->","PeriodicalId":47381,"journal":{"name":"International Journal of Emerging Markets","volume":"4 1","pages":""},"PeriodicalIF":2.7000,"publicationDate":"2024-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":"{\"title\":\"The determinants of life insurance companies profitability in South Africa: new evidence from a dynamic panel threshold estimation technique\",\"authors\":\"Sylvester Senyo Horvey, Jones Odei-Mensah, Albert Mushai\",\"doi\":\"10.1108/ijoem-08-2022-1225\",\"DOIUrl\":null,\"url\":null,\"abstract\":\"<h3>Purpose</h3>\\n<p>Insurance companies play a significant role in every economy; hence, it is essential to investigate and understand the factors that propel their profitability. Unlike previous studies that present a linear relationship, this study provides initial evidence by exploring the non-linear impacts of the determinants of profitability amongst life insurers in South Africa.</p><!--/ Abstract__block -->\\n<h3>Design/methodology/approach</h3>\\n<p>The study uses a panel dataset of 62 life insurers in South Africa, covering 2013–2019. The generalised method of moments and the dynamic panel threshold estimation technique were used to estimate the relationship.</p><!--/ Abstract__block -->\\n<h3>Findings</h3>\\n<p>The empirical results from the direct relationship reveal that investment income and solvency significantly predict life insurance companies' profitability. On the other hand, underwriting risk, reinsurance and size reduce profitability. Further, the dynamic panel threshold analysis confirms non-linearities in the relationships. 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The determinants of life insurance companies profitability in South Africa: new evidence from a dynamic panel threshold estimation technique
Purpose
Insurance companies play a significant role in every economy; hence, it is essential to investigate and understand the factors that propel their profitability. Unlike previous studies that present a linear relationship, this study provides initial evidence by exploring the non-linear impacts of the determinants of profitability amongst life insurers in South Africa.
Design/methodology/approach
The study uses a panel dataset of 62 life insurers in South Africa, covering 2013–2019. The generalised method of moments and the dynamic panel threshold estimation technique were used to estimate the relationship.
Findings
The empirical results from the direct relationship reveal that investment income and solvency significantly predict life insurance companies' profitability. On the other hand, underwriting risk, reinsurance and size reduce profitability. Further, the dynamic panel threshold analysis confirms non-linearities in the relationships. The results show that insurance size, investment income and solvency promote profitability beyond a threshold level, implying a propelling effect on life insurers' profitability at higher levels. Below the threshold, these factors have an adverse effect. The study further points to underwriting risk, reinsurance and leverage having a reduced effect on life insurers' profitability when they fall above the threshold level.
Practical implications
The findings suggest that insurers interested in boosting their profit position must commit more resources to maintain their solvency and manage their assets and returns on investment. The study further recommends that effective control of underwriting risk is critical to the profitability of the life insurance industry.
Originality/value
The study contributes to the literature by providing first-time evidence on the determinants of life insurance companies' profitability by way of exploring threshold effects in South Africa.
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