Full Article

This study investigates risk transfer in the non-life insurance market in the light of reinsurance utilisation and technical provisions with a view to understanding how managerial risk management decisions impact on reinsurance, capital and solvency management in the insurance industry. It is grounded in Agency Theory as a means of exploring the behavioural and strategic underpinnings of insurers’ decisions. A quantitative approach is employed for the study, the ex-post facto research design is used and purposive sampling method is used in drawing data from the annual reports of thirty-six (36) non-life insurance companies over a period of twenty-three (23) years. Descriptive statistics, correlation analysis and panel data regression techniques were used in analyzing the data and results revealed a significant positive effect of reinsurance utilisation proxied by reinsurance recoverable to policyholder surplus on insurers’ technical provisions. The findings support the proposition of the Agency theory as reinsurance is seen as governance and signaling mechanisms used by managers to align organizational actions with stakeholder expectations and regulatory requirements. It is recommended that policymakers and regulators should strengthen the supervision of reinsurance practices and encourage risk-based supervision that promotes transparency in financial reporting in non-life insurance companies in Nigeria. Keywords: Reinsurance utilization, technical provisions, Agency theory, solvency, profitability. JEL classification: G22, M20

Keywords: Reinsurance utilisation; technical provisions, Agency theory; solvency; profitability

Citation: Ukpong, M.S. & Adeleke, I. (2026). Economics of Risk Transfer: Modeling the Relationship Between Reinsurance Utilisation and Technical Provisions in Emerging Non-Life Insurance Markets. International Journal of Innovative Research in Accounting and Sustainability, 11(2), 150-166.