Performance effect of risk-based capital policy on insurers : longitudinal microdata evidence
Risk-based capitalization (RBC) is an insurance regulation policy aimed at protecting policyholders. But effects of this policy on insurers’ performance are conjectural as empirical studies are scarce. This study investigates RBC influence, in the context of capital structure, on return on asset (RO...
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| Format: | Article |
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Routledge
2019
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| _version_ | 1825937482728865792 |
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| author | Akpan, Sunday S. Mahat, Fauziah Amin Noordin, Bany Ariffin Md Nassir, Annuar |
| author_facet | Akpan, Sunday S. Mahat, Fauziah Amin Noordin, Bany Ariffin Md Nassir, Annuar |
| author_sort | Akpan, Sunday S. |
| collection | UPM |
| description | Risk-based capitalization (RBC) is an insurance regulation policy aimed at protecting policyholders. But effects of this policy on insurers’ performance are conjectural as empirical studies are scarce. This study investigates RBC influence, in the context of capital structure, on return on asset (ROA), return on equity (ROE) and earnings per share (EPS) of insurers using 2SLS fixed and random effect models. From the results, RBC improved ROA and EPS significantly, but reduced ROE insignificantly. It concluded that RBC policy make a significant positive contribution to ROA and EPS. ROE is not significantly affected by RBC policy for the period under review. |
| first_indexed | 2024-03-06T11:00:11Z |
| format | Article |
| id | upm.eprints-94540 |
| institution | Universiti Putra Malaysia |
| last_indexed | 2024-03-06T11:00:11Z |
| publishDate | 2019 |
| publisher | Routledge |
| record_format | dspace |
| spelling | upm.eprints-945402022-12-02T07:55:52Z http://psasir.upm.edu.my/id/eprint/94540/ Performance effect of risk-based capital policy on insurers : longitudinal microdata evidence Akpan, Sunday S. Mahat, Fauziah Amin Noordin, Bany Ariffin Md Nassir, Annuar Risk-based capitalization (RBC) is an insurance regulation policy aimed at protecting policyholders. But effects of this policy on insurers’ performance are conjectural as empirical studies are scarce. This study investigates RBC influence, in the context of capital structure, on return on asset (ROA), return on equity (ROE) and earnings per share (EPS) of insurers using 2SLS fixed and random effect models. From the results, RBC improved ROA and EPS significantly, but reduced ROE insignificantly. It concluded that RBC policy make a significant positive contribution to ROA and EPS. ROE is not significantly affected by RBC policy for the period under review. Routledge 2019-12 Article PeerReviewed Akpan, Sunday S. and Mahat, Fauziah and Amin Noordin, Bany Ariffin and Md Nassir, Annuar (2019) Performance effect of risk-based capital policy on insurers : longitudinal microdata evidence. Journal of African Business, 22 (1). 85 - 105. ISSN 1522-8916; ESSN: 1522-9076 https://www.tandfonline.com/doi/full/10.1080/15228916.2019.1695181 10.1080/15228916.2019.1695181 |
| spellingShingle | Akpan, Sunday S. Mahat, Fauziah Amin Noordin, Bany Ariffin Md Nassir, Annuar Performance effect of risk-based capital policy on insurers : longitudinal microdata evidence |
| title | Performance effect of risk-based capital policy on insurers : longitudinal microdata evidence |
| title_full | Performance effect of risk-based capital policy on insurers : longitudinal microdata evidence |
| title_fullStr | Performance effect of risk-based capital policy on insurers : longitudinal microdata evidence |
| title_full_unstemmed | Performance effect of risk-based capital policy on insurers : longitudinal microdata evidence |
| title_short | Performance effect of risk-based capital policy on insurers : longitudinal microdata evidence |
| title_sort | performance effect of risk based capital policy on insurers longitudinal microdata evidence |
| work_keys_str_mv | AT akpansundays performanceeffectofriskbasedcapitalpolicyoninsurerslongitudinalmicrodataevidence AT mahatfauziah performanceeffectofriskbasedcapitalpolicyoninsurerslongitudinalmicrodataevidence AT aminnoordinbanyariffin performanceeffectofriskbasedcapitalpolicyoninsurerslongitudinalmicrodataevidence AT mdnassirannuar performanceeffectofriskbasedcapitalpolicyoninsurerslongitudinalmicrodataevidence |