Risk management, corporate governance and the performance of insurance companies in Uganda

Abstract

The aim of this research was to assess how risk management influences the performance of insurance companies in Uganda and to determine the degree to which corporate governance affects this relationship in the context of Ugandan insurance companies. The study employed a quantitative research approach, utilizing a correlational study design. A total of 136 participants were selected through simple random sampling, but only 120 questionnaires were returned and considered for analysis. Data collection was conducted through a self-administered questionnaire. The gathered data were coded and subjected to analysis using the Pearson Product Moment Correlation to examine relationships between the variables under study. Additionally, mediation analysis was performed using the Process Macro for SPSS. The findings revealed positive correlations between risk identification and the organization's performance, as well as risk assessment and analysis. Similarly, risk mitigation, risk monitoring, and overall risk management were positively correlated with organizational performance. Further analysis through multiple regression indicated that risk identification, risk assessment and analysis, risk mitigation, risk monitoring and reporting were significant predictors of performance. Additionally, risk management emerged as a significant predictor of performance. The results also demonstrated that the relationship between risk management and organizational performance was moderated by corporate governance (b= 0.316, p=.0215, [LLCL, ULCI] = [.1568, .3317]). In light of these findings, it is recommended that companies in Uganda, particularly those in Wakiso and Kampala districts, develop policies aimed at fostering risk identification, mitigation, monitoring, assessment, and management. This is essential, as the results suggest that encouraging these risk management strategies positively influences organizational performance.