Loss reserving behaviour in insurance markets: Evidence from Mauritius |
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| Authors: | Abdul Latif Alhassan |
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| Affiliation: | Development Finance Centre (DEFIC), Graduate School of Business, University of Cape Town, Cape Town, South Africa |
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| Abstract: | This study examines determinants of loss reserves among a sample of 14 general insurance companies in Mauritius from 2008 to 2015. The paper documents evidence that on average, technical reserves account for 45.41% of total assets, made of 19.79% in unearned premiums and 25.62% in outstanding claims. Using panel regression techniques, the findings suggest that general insurers manipulate their earnings through reserve provisions to smooth income and tax considerations. In addition, underwriting risk and reinsurance increases technical reserves, whereas market concentration induces high provisioning for outstanding claims. Policy recommendations for industry regulations are discussed. |
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