Financial risk management by Malaysian life insurers : the application of reinsurance / Rosmi Yuhasni Mohamed Yusuf, Saharani Abdul Rashid and Rozain Daud

Mohamed Yusuf, Rosmi Yuhasni and Abdul Rashid, Saharani and Daud, Rozain (2005) Financial risk management by Malaysian life insurers : the application of reinsurance / Rosmi Yuhasni Mohamed Yusuf, Saharani Abdul Rashid and Rozain Daud. Social and Management Research Journal (SMRJ), 2 (2). pp. 25-40. ISSN 1675-7017

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Abstract

This research examines the determinants of reinsurance use as a tool for financial risk management in the Malaysian life insurance industry. Weestimate a multivariate linear regression model using a sample of /7 Malaysian life
insurers for the period between the years 2000 to 2003 with data taken from the Annual Insurance Report published by the Bank Negara Malaysia and Life Insurance Revenue Account ofthe respective insurer. Our results indicate that determinants ofreinsurance used are negatively influenced by a firm's leverage and the availability of cash but positively influenced by bank affiliation relationship. This research however fails to find evidence that reinsurance decision is influenced byfactors such as afirm ssize, profitability, taxes and group memberships. We conclude that reinsurance is still being applied in Malaysia as a pure risk spreading or risk transfer tool with minimal role in managing the financial risk in the Malaysian life insurance industry.

Metadata

Item Type: Article
Creators:
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Mohamed Yusuf, Rosmi Yuhasni
UNSPECIFIED
Abdul Rashid, Saharani
UNSPECIFIED
Daud, Rozain
UNSPECIFIED
Subjects: H Social Sciences > HG Finance > Insurance > Insurance business. Insurance management
H Social Sciences > HG Finance > Insurance > Malaysia
H Social Sciences > HG Finance > Insurance > Life insurance > Life insurance business. Management
Divisions:
Journal or Publication Title: Social and Management Research Journal (SMRJ)
UiTM Journal Collections: UiTM Journal > Social and Management Research Journal (SMRJ)
ISSN: 1675-7017
Volume: 2
Number: 2
Page Range: pp. 25-40
Official URL: https://smrj.uitm.edu.my/
Item ID: 12965
Uncontrolled Keywords: Financial risk management, Malaysian Life Insurers, reinsurance.
URI: https://ir.uitm.edu.my/id/eprint/12965

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12965

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