Intellectual Capital Efficiency and Risk-Taking Behaviour of Insurance Companies in Ghana

Abstract

Our study focused on the link between intellectual capital efficiency (ICE) and its individual components and underwriting risk. It exam ined the effect of ICE, and structural (SCE) and human capital (HCE) efficiency on the underwriting risk of Ghanaian life and non-life insurers. It used panel data of 31 insurance firms in Ghana, of which 14 and 17 were life and non-life insurers, respectively, from 2008 to 2019. A generalized least squares estimation technique was used to examine the relationship between ICE and underwriting risk in life, non-life, and the entire insurance sector. The results suggest that there is a significant negative relationship between HCE and under writing risk in the Ghanaian insurance sector. However, there was no relationship between ICE and underwriting risk and between SCE and underwriting risk. As the first to examine ICE and risk taking behavior in any African country, our study is significant in managerial decision-making and insurance policy formulation to reduce risk in the insurance industry.

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Research Article

Keywords

Intellectual capital, underwriting risk, human capital efficiency

Citation

To cite this article: Saint Kuttu, Lord Mensah & Daniel Attah-Kyei (2023): Intellectual Capital Efficiency and Risk-Taking Behaviour of Insurance Companies in Ghana, Journal of African Business, DOI: 10.1080/15228916.2023.2230396

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