Ronoh K Michael is a dedicated professional in the financial management field with extensive experience in capital budgeting, operational financial planning and business analysis.
Abstract
Insurance companies which play a critical role in protecting businesses and individuals from adverse events and earn their revenues primarily from premiums and investment income. They form a critical part of the financial system hence the study recommended that a well-coordinated regulatory approach across countries and regions will ensure that systemic risk, where the failure of one insurance company creates a contagion effect, is mitigated given the inter-linkages between financial organizations in a globalized system.
Liquidity management has significant implications for the profitability of insurance companies in particular and all organizations in general. In this regard, many organizations have adopted complex and rigorous programs to manage their liquidity position. The core purpose of this research study was to establish the influence of liquidity management on insurance corporations’ financial performance in Kenya.
The research used secondary data from annual financial statements of 47 insurance companies and other industry publications covering the period from 2014-2018.
Multiple regression analysis was used to analyze the relationship between the variables under study. Test of statistical assumptions was carried out on the individual variables under study and on the statistical model itself confirm that it’s adequacy in predicting the relationship between the variables involved. The results of all statistical tests of regression analysis revealed that no assumptions were violated hence the conclusions drawn were not biased.
Statistical package developed by IBM Corporation, SPSS V 25.0 was used to generate quantitative output of statistical results.
The results show that Liquidity management and profitability are positively correlated.
Research Supervisors
DR. WINNIE NYAMUTE