A Conceptual framework for factors that influence performance of financial intermediaries in South African Insurance Sector.

Abstract

This study set out to develop a conceptual framework aimed at understanding the key factors affecting the performance of financial intermediaries. The framework focused on various factors, including Product, Process, Price, People, Market Regulation, Market Conduct, and Market Conduct Principles, to evaluate their impact on organisational performance. Furthermore, the study identified the significance of Effectiveness Safeguards, Risk Tolerance, and Additional Safeguards in reducing risks and improving operational stability. A quantitative research design was utilised, involving 300 participants from a market conduct authority, employing correlation analysis, structural equation modeling, and logistic regression for data interpretation. The research took a positivist stance to recognise participants' perspectives and aid in the translation of results. Closeended questionnaires were distributed to a sample group of 346. The questionnaire was completed by 300 participants, yielding an 87.7% response rate. Using Cronbach's alpha to assess the reliability of these elements, the research found that Process, Price, and Risk Tolerance had strong internal consistency, while Product, People, and Market Regulation exhibited low reliability, suggesting potential measurement challenges. The findings underscored the need for refining certain safeguards and strategies to improve performance outcomes. The study concluded that a well-designed balance between these factors was essential for financial intermediaries to achieve sustainable growth and manage risks effectively. Recommendations for future research were made to refine measurement tools for accuracy and expand the framework to address emerging challenges in hedge funds, collective investment schemes and crypto assets contracts.