Modelling of educational policy to sustain reserves. A case study of State Insurance Company.
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Date
June, 2016
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Abstract
The Insurance Industry in Ghana has seen setbacks though situations after 1986
stabilized and many Insurance companies came into being. The entry into the
market of many firms led to stiff competition which resulted in firms engaging in
unethical malpractices. The firms in their operations registered poor performance
over the years. The main objective of the study was to model one year educational plan for State Insurance Company (SIC) clients by estimating a reasonable
premium to the full year for which the company can also earn profit after selling
the product. Among the insurance companies in the country, SIC-Life insurance
Company was purposively selected as a sample to represent Ghana’s Insurance
sector. The study took the form of longitudinal and documentary review that
included among others, financial, annual and other corporate documents. The
study revealed that SIC-Life Insurance Company sells four life products under
Universal Life policies namely; Family Security Plan, Flexi-Child Education Policy, Ultimate Life Plan and Education Plan. Annual premiums estimated for the
policy at 6% interest rate using principles of equivalence indicated the company
can keep enough reserves as compare with their current operations. Profit testing
analysis was performed to arrive at 1.38% profit margin of the education plan.
The study revealed that Insurance companies manage risk through a number of
ways including re-insurance and co-insurance. It is recommended that Insurance companies should conform to the ethical conduct and statutory regulations
and procedures if they are to succeed, including optimal premium ratings, sound
investment policies and risk management processes.
Description
A thesis submitted to the Institute of Distance Learning, Department of Mathematics, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Msc Actuarial Science