AN ASSESSMENT OF THE PERFORMANCE OF NILE INSURANCE COMPANY S.C.

Abstract

The study was undertaken to assess performance of Nile Insurance Company S.C. using versatile combination of financial and non-financial soundness indicators for an insurance company. Financial soundness assessment has been made using CARAMEL frame work (Capital adequacy, Asset quality, Reinsurance and Actuarial issues, Management soundness, Earnings and Profitability and Liquidity); while market share, growth in number of branches, dealing with dropouts, market research, customer satisfaction and employee performance and satisfaction are used for non-financial soundness assessment. To this end the study employed documentary analysis which covered ten years period ending June 2016 (i.e. 2006 to 2016). The sample size was 115 customers and 45 employees, from 5 branches and claims department, for the survey and 3 senior managers for an interview. The findings of the study indicated that Nile Insurance Company used is capital to write more business, has good performance in receivable management but risk associated in equity investment is high, risks retained in-house found above statutory limit, loss ratio of the company is high and affecting operational profitability, and liquidity risk of the company is high. Market share of the company is improving but retention of existing business declining. The level of customer and employee satisfaction is slightly above average. Finally, the study recommended NIC to enforce risk management and underwriting practices, diversify its investments and enhance customer and employee retention and satisfaction.