2 52 CONCLUSION African Life Assurance Company with a wide branch network

2 52 conclusion african life assurance company with a

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5.2 CONCLUSION African Life Assurance Company with a wide branch network throughout the country in order to take services closer to their customers and hence enhance market share in the face of growing competition. Owing to their large size, it can be concluded that this company are faced with greater risks and hence the need to manage risk appropriately. African Life Assurance Company had put in place measures to spearhead risk management and this could explain why this insurance company had continued to be in operation for a long duration of time. It can be inferred that the companies that had existed for a long time had more mature risk management programs which had contributed to their financial sustainability over the years. The study also concludes that risk identification and mitigation play the most significant role in influencing financial performance of African Life Assurance Company. Hence, risk identification can essentially be said to be the key starting point of any risk management program as the company cannot manage what is unknown. On the other hand, once identified, risks must be mitigated so that the impact on the firm is reduced. The study results, however, also show that all the four risk management practices were of some significance in influencing financial performance and hence the conclusion of this study is that African Life Assurance Company need to adopt a multifaceted approach in their risk management efforts that includes all the practices that were the focus of this study in order to realize the full benefits of their risk management programs. Risk management significantly contributes to financial performance of African Life Assurance Company, with adoption of risk management practices explaining 71.6% of the variation in financial performance of the company. The study, therefore, concludes that there is a strong relationship between adoption of risk management practices and financial performance of 2
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African Life Assurance Company. The study further concludes that there are other factors that influence financial performance of the company and that these explain the remaining 28.4% of the variation in financial performance of the company. 5.3 RECOMMENDATIONS From the study, risk identification and mitigation were found to have a huge impact on the financial performance of African Life Assurance Company. The study therefore recommends that the management of African Life Assurance Company should put in place cost-effective measures for timely risk identification and effective risk mitigation so as to ensure that their financial performance is not impacted negatively. The study also recommends that the management of the insurance company should continuously assess their risk management practices to see if they are still practical in the face of a continuously changing operating environment, for instance the new regulatory pressures of solvency 2 and Basel regulatory regimes.
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  • Spring '20
  • Dr. ASRAVOR

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