Effect of unclaimed assets on the performance of life assurance companies in Kenya
Abstract
Kenya is also among the countries in the world that have enacted legislation to regulate
the management of unclaimed assets from various companies. The Unclaimed Financial
Assets Act of 2011 is the main regulation that outlines the way companies are supposed
to handle unclaimed assets in their custody over a specified period of time. The Act
provides for the legislative framework for dealing with unclaimed financial assets. The
purpose of this study was to establish the effect of unclaimed assets on the profitability of
life assurance companies in Kenya.
The study adopted a survey research design that included all the life assurance companies
in Kenya. The number of life assurance companies was 13 by June 2013. The researcher
opted for a census this was a small number. The study made use of secondary data that
was collected from published accounts of the life assurance companies in Kenya. The
data was analyzed using simple linear regression with unclaimed assets as the
independent variable and profitability as the dependent variable.
The study revealed that unclaimed assets formed a significant percentage of the profits
that were declared by life assurance companies in Kenya before the year 2011. However,
after the enactment of the bill on unclaimed assets in 2011, all the life assurance
companies were required to submit their unclaimed assets to the government and this
significantly affected their total profits. Their profits seemed to significantly drop for the
years 2011 and 2012 when the unclaimed assets were removed from the profit and loss
accounts of the life assurance companies. The study concludes that unclaimed assets
formed a significant portion of the profits of commercial banks.
Citation
Degree Of Master of Business Administration (MBA)Publisher
University of Nairobi School of Business
Description
A research project report submitted for partial
fulfillment of the requirements for the award of a
Master of Business Administration Degree, University
of Nairobi