GTUC FINAL.docx - GHANA TECHNOLOGY UNIVERSITY COLLEGE FACULTY OF BUSINESS ADMINISTRATION B.Sc BUSINESS ADMINISTRATION(ACCOUNTING TOPIC THE EFFECTS OF

GTUC FINAL.docx - GHANA TECHNOLOGY UNIVERSITY COLLEGE...

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GHANA TECHNOLOGY UNIVERSITY COLLEGE FACULTY OF BUSINESS ADMINISTRATION B.Sc. BUSINESS ADMINISTRATION (ACCOUNTING) TOPIC: THE EFFECTS OF RISK MANAGEMENT ON THE PROFITABILITY OF INSURANCE COMPANIES (AFRICAN LIFE ASSURANCE COMPANY LIMITED) BY JAMES DAGADU (040915580) ……………………. CHARLES EPHTAIM (040915541) …………………….. SUPERVISOR: MR. ISAAC KWAME AMOAH-ARHINFUL ...................................................
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CANDIDATES DECLARATION: We hereby declare that this research is the result of our own original work and that no part of it has been presented here or another institution for another degree. JAMES DAGADU ( 040915580) Signature…………………………….. DATE……………………………………. CHARLES EPHRAIM ( 040915541) Signature…………………………….. DATE……………………………………. SUPERVISOR’S DECLARATION: I hereby declare that I have supervised the students in developing a research topic and proposal submitted herein and it has been assessed with the laid down guidelines by Ghana Technology University College. SUPERVISOR: MR. ISAAC KWAME AMOAH-ARHINFUL Signature……………….…………….. DATE………………………………… A RESEARCH SUBMITED TO GHANA TELECOM UNIVERSITY COLLEGE, IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF BACHELOR DEGREE OF BUSINESS ADMINISTRATION IN ACCOUNTING.
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DEDICATION We would like to dedicate our dissertation work to …………….
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ACKNOWLEDGEMENT:
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ABSTRACT The concept of risk management is now an established arena of theoretical and empirical enquiry globally, but the central query remains whether organizational structures have been in some respect transformed by the effects of this development. This review examines the effects of risk management on profitability as the core factors in any business or investment decision. In context, any strategic decision taken by an organization should explicitly consider risk. Decision makers should demand a higher profit or return on high risk investments portfolios on the basis of the fact that higher risk investment portfolios must be compensated with a higher return (the higher the risk, the higher the return). This review also examines the concept and role of insurance in the economy including risk transfer of unanticipated acute loses on productive assets to third party insurer that have comparative advantage in risk pooling. From a historical perspective, most notably in the industrial revolution in the United Kingdom (UK) and the industrial breakthrough in Europe and North America, an essential role is certainly played by the increasing geographical concentration of people and assets, most at times in certain jurisdictions particularly subject to catastrophe risk, leading to increasing claim sizes in the event of earthquakes, floods, storms etc. in view of this capacity limits of insurability, the idea making additional capacity for catastrophe risk outside the insurance market arises. Other risk transfer and mitigation factors include asset allocation, in a competitive insurance market, competition among the insurers increase productive efficiency, provide investors with diversified portfolio choice, enhance liquidity and induces better monitoring and corporate governance. They also facilitate risk sharing by reducing transaction cost and diversification of investment portfolios.
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