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Enterprise risk management and performance of the South African insurers: the moderating role of corporate governance

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  • Sylvester Senyo Horvey

    (University of the Witwatersrand)

  • Jones Odei-Mensah

    (University of the Witwatersrand)

Abstract

This study contributes to the literature by examining the effect of enterprise risk management (ERM) on insurers’ performance (underwriting performance and Return on Assets) and investigating how corporate governance characteristics such as board size, board independence and gender diversity moderate the ERM-performance relationship. The study employs the generalised method of moments on a sample of 63 insurers in South Africa, covering 2015–2019. The study’s findings agree with the literature that a positive relationship exists between ERM and insurers’ performance. This was consistent with both performance indicators. Again, we find that board size, board independence, and gender diversity interact with ERM in affecting insurers’ performance, and the relationship was significantly positive. This implies that corporate governance plays a significant role in promoting ERM effectiveness in affecting performance. Therefore, insurers interested in ensuring a robust ERM system should leverage these governance factors to appreciate the overall impact of ERM on performance.

Suggested Citation

  • Sylvester Senyo Horvey & Jones Odei-Mensah, 2024. "Enterprise risk management and performance of the South African insurers: the moderating role of corporate governance," Risk Management, Palgrave Macmillan, vol. 26(4), pages 1-28, December.
    • Handle: RePEc:pal:risman:v:26:y:2024:i:4:d:10.1057_s41283-024-00149-1
    DOI: 10.1057/s41283-024-00149-1
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    References listed on IDEAS

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    More about this item

    Keywords

    Enterprise risk management; Corporate governance; Insurers performance;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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