Can an insurance company report strong profits while still facing liquidity pressure? This question lies at the heart of a completed research study by Peter Makau, Grace Wando and Nancy Bonareri from Multimedia University of Kenya (MMU), examining the relationship between cashflow management and financial resilience in the insurance industry.
The study addresses a critical gap in traditional financial performance assessment: profitability does not always reflect an insurer’s ability to generate sufficient cash to meet claims and other obligations when they fall due. Using Britam Holdings PLC as a case study, the research explores whether cashflow-based indicators provide a more reliable picture of financial stability than conventional profitability measures alone.
The team’s proposed framework integrates four key indicators: operating cashflow strength, cashflow adequacy, claims pressure and premium collection efficiency. By analysing historical financial data and applying regression techniques, the model examines how these indicators relate to liquidity and profitability measures, including Return on Assets (ROA) and Return on Equity (ROE). The approach is designed to help insurers identify emerging financial stress earlier and make better-informed decisions on claims management, capital allocation and investment planning.
What distinguishes the research is its shift from predominantly accounting-based performance measures towards the actual movement and availability of cash. By bringing multiple cashflow indicators into one analytical framework, the study offers a practical perspective for actuaries, insurance executives, finance professionals and regulators seeking to strengthen risk monitoring and support more resilient insurance operations.
The research earned First Runner-Up at the 2026 National Actuarial Product Development Competition, recognising the team’s contribution to addressing a real-world financial challenge through actuarial analysis. Its findings reinforce an important lesson for the insurance industry: sustainable performance depends not only on the profits reported today, but also on the ability to meet financial commitments tomorrow.
Through its Product Development Competition, the Actuarial Students Society of Kenya (ASSK) continues to showcase emerging actuarial talent and encourage research that translates analytical thinking into practical industry solutions. ASSK welcomes engagement from insurers, financial institutions, researchers and other stakeholders interested in exploring the application and further development of this work.
Meet the Researchers
Peter Makau – mpeternzioki@gmail.com | LinkedIn Profile
Grace Wando
Nancy Bonareri
Multimedia University of Kenya (MMU)
Interested in collaboration or partnership? Contact ASSK to explore opportunities to advance innovative actuarial research and strengthen the future of Kenya’s insurance industry.
This product was presented in this year’s (2026) National PDC held at Daystar University