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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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Main Authors: Akpan, Sunday S., Mahat, Fauziah, Amin Noordin, Bany Ariffin, Md Nassir, Annuar
Format: Article
Published: Routledge 2019
Online Access:http://psasir.upm.edu.my/id/eprint/94540/
https://www.tandfonline.com/doi/full/10.1080/15228916.2019.1695181
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spelling my.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
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
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.
format Article
author Akpan, Sunday S.
Mahat, Fauziah
Amin Noordin, Bany Ariffin
Md Nassir, Annuar
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
author_facet Akpan, Sunday S.
Mahat, Fauziah
Amin Noordin, Bany Ariffin
Md Nassir, Annuar
author_sort Akpan, Sunday S.
title 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_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_sort performance effect of risk-based capital policy on insurers : longitudinal microdata evidence
publisher Routledge
publishDate 2019
url http://psasir.upm.edu.my/id/eprint/94540/
https://www.tandfonline.com/doi/full/10.1080/15228916.2019.1695181
_version_ 1753789923103604736
score 13.160551

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