Life Insurance Companies: Determinants of Cost Efficiency and Profitability

One of the most important aspects measuring a firm’s performance is its efficiency, through which firm expected to envisage effective cost reductions, thereby enhancing profitability. However, studies conducted explore determinants insurance companies’ has concentrated on accounts earnings information and components are known explain small proportion performance. Also, either lump all companies together or pay more attention non-life insurance, making it difficult evaluate fast growing life industry in Ghana. Therefore, this study examines efficiency Ghana utilising data from twelve for period 2013-2017. The scores were calculated using Efficiency Measurement System software. fixed effect panel regression results show that, significant both profit functions are: price labour, commission, gross premium net investment income. It was also revealed average, about 71.2% efficient 41.7% efficient. Further analysis reveals changes have statistically positive firms’ Return Asset. Policy-makers should institute policies that encourage these operate efficiently order make capital allocation decisions avoid collapse.