Risk Management and Financial Performance of Life and Non-Life Insurance Firms in South Africa

This paper examines the relationship between risk management practices and financial performance in the life and non-life insurance companies in South Africa from 2018 to 2024. Data computed from the annual balance sheet statement were constructed in a Panel form using Excel, with the multivariate regression model estimated. The cross-sectional and time-varying nature was analyzed using descriptive and regression analyses to envisage the best linear unbiased estimators. The OLS model yields the best results after checking for residual diagnostics. Findings show that CR is positive and shows a significant relationship with the ROA of the LI and NLI firms in SA. It suggests that directors and managers in this industry are implementing effective CR management strategies to optimize revenue and asset growth. I recommend that, as the LI and the NLI companies continue their operation by issuing a policy to cover risks, policymakers should strengthen the MR management strategies because of their negative effects on ROE.