Determinants of Reinsurance Demand in The Ghanaian Insurance Market

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2017-07

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University of Ghana

Abstract

This study examined the nature and determinants of reinsurance demand by insurance companies in Ghana. Data gathered from financial reports of insurance companies and macroeconomic variables from the Bank of Ghana database for a period of 7 years (2007-2013) was analysed using the panel random effect regression. The study found firm size, underwriting risks, insurance leverage, profitability and solvency margin to significantly influence reinsurance demand by insurance companies in Ghana. Macroeconomic variables as well as ownership structure, number of years, growth in premium, liquidity, business concentration and product diversification were found not to be a significant factor in reinsurance demand. Based on the study findings, the study recommended that insurance companies, policy makers, regulators, and insurance analysts take the issue of reinsurance with much importance.

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Reinsurance, return on assets, underwriting risk, annual growth rate, liquidity, ownership structure, Ghana

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