The financial performance of insurance companies can be analyzed at micro and macroeconomic level, being. Determinants of performance of tunisia insurance companies. Insurance industry is part of immune and repair systems of an economy. This study investigated determinants of financial performance of listed financial sectors in karachi stock exchange from 2008 to 2012. Factors, which might affect the profitability of insurance companies, can be internal or external factors. Financial performance is proxied by return on asset as dependent variable. Discussing and analyzing the determinants of performance of insurance companies, is considered important in the corporate. It examines the solvency of life insurance companies and the current system used by the national insurance commission nic to monitor solvency of life insurance companies in ghana. The determinants of insurance companies profitability in ethiopia. The fixed effect panel data model regression analysis. Third, the financial health of insurance companies in singapore seems to be significantly weakened by the asian financial. The financial performance of life insurance companies in. Financial performance determinants of organi zations.
Analysing the determinants of financial performance for uk. Ethiopian insurance industryestablishes with the aid of professional financial managers, that particular debtequity mix that maximizes its value and minimizes its weighted average cost of capital. Financial performance of general insurance underwriters attempts to measure how. The determinants of financial performance in insurance. Determinants of insurance company profitability in. Determinants of financial performance of insurance companies of usa and uk during global financial crisis 2007 2016. Profit is a crucial prerequisite for an increasing competitiveness of a. Financial performance is a subjective measure of how well a firm can use assets from its primary mode of business and generate revenues. Factors affecting the profitability of insurance companies the variation of profits between insurance companies over the years, within a country, leads to believe that internal factors or specific factors of a firm play a major role in determining profitability. The determinants of financial performance in the romanian insurance market, international journal of academic research in accounting, finance and management sciences, human resource management academic research society, international journal of academic research in accounting, finance and management sciences, vol. The financial performance of insurance companies is analyzed at.
Issn 24148385 online issn 24148377 print european journal of multidisciplinary studies janapr 2016 vol. The aim of this research is to assess the financial performance of the life insurance industry of an emerging economy. Evidence from the philippines andres cudiamat 2, jay stephen siy 1,2 1corvinus university of budapest 2university of the philippines baguio abstract. The study also examines the relationship among the three measures of insurers profitability, which are investment income, underwriting profit and the. The determinants of financial performance in general. Pdf the determinants of financial performance in the.
Factors affecting the profitability of insurance companies. Yuqi li 2007 determinants of banks profitability and its implication on risk management practices. Second, the factors that significantly affect life insurers financial health are firm size, change in asset mix, investment performance, and change in product mix, but the last three factors are more applicable to japan. Determinants of financial performance of insurance companies of usa and uk during global financial crisis 2007 2016 january 2019 doi. Graduates of 20182019 ay office of graduate programs 1. Agents are the sales force of insurance companies or takaful operators. Factors affecting the profitability of insurance companies in. The general objective of the study is to find out the determinants of the profitability of insurance firms in ghana. Efficiency determinants and capacity issues in angolan insurance companies, south african journal of economics, economic society of south africa, vol. This study investigates determinants of financial health of ghanaian life insurance companies, a market that has experienced significant change in recent years. Literature from past studies reveal that the findings from most researchers have not reached a common conclusion.
Review of literature relevant earlier studies relating to the determinants of profitabilityfinancial performance of insurance firms are as follows. Determinants of profitability in life insurance companies. Financial performance refers to a firms profitability, that is how large the revenues exceed the costs incurred in generating them. Explanatory variables based on internal size of firm, liquidity, leverage and asset turnover and external factors gdp gross. European scientific journal january 2015 edition vol. Pdf the determinants of financial performance in the romanian. The population comprised all the 23 general kenyan insurance firms. Discussing and analyzing the determinants of performance of insurance companies, is considered important in the corporate finance literature because of their role as intermediaries. The financial performance of insurance companies is also relevant within the macroeconomic context since the insurance industry is one of the financial system components, fostering economic growth and stability. Determinants of profitability in private insurance.
Determinants of financial performance of insurance. Determinants of financial performance of general insurance. Determinants of financial performance of financial sectors. The insurance industry started developing after liberalization of the market in 1999.
The effect capital structure on financial performance of insurance companies. The determinants of financial health of asian insurance. Determinants of profitability in private insurance companies. Panel evidence from the uk, the university of nottingham. However, in the context of the insurance sector, they have given some attention. Our findings show that profitability, liquidity, size and organisational form are the significant determinants that affect financial performance of insurance companies in the uk. The study established that capital structure affected the performance of life insurance companies because it affects the financial costs and burdens of a company. The determinants of financial performance in the romanian insurance market, international journal of. Objective of the study is to explore the factors that affect financial performance of albanian. Then, leverage, tangibility, liquidity and risk dont influence the performance of tunisian insurance companies.
Determinants of nonlife insurance companies profitability. In this study, we examine the impact of firmspecific characteristics size, leverage, tangibility, risk, growth, liquidity and age on the performance of eight insurance companies in tunisia a period of 8 years 20052012. General takaful and insurance companies in malaysia muhaizam ismail preserving financial stability is integral in developing financial institutions that are robust, resilient and competitive. The term is also used as a general measure of a firms. General insurance underwriters, financial performance. This is low and hence the need to establish factors that can influence improved performance of some of the key players the general insurance companies. The objective of this study was to investigate the factors of financial performance of financial sectors in pakistan. Determinants of financial performance of insurance companies of. Descriptive statistics, correlation matrix, chow test, hausman test for fixed effect model and random effect model and breuschpagan lagrange. Determinants of financial performance of insurance companies in kenya. Pdf determinants of financial performance of insurance.
Determinants of performance of insurance companies in. The determinants that affect the financial performance of an insurance company are complicated due to the intangible nature of insurance products and the lack. Ana and ghiorghe 2014 attempted to analyze determinants of the financial performance in the romanian insurance market during the period of 20082012 using 21 insurance companies dd 24 10. The case of general takaful and insurance companies in malaysia muhaizam ismail preserving financial stability is integral in developing financial institutions that are robust, resilient and competitive. Determinants of financial perform companies aster ketema. In particular the study delves into the major determinants of the profitability of the life insurance industry of ghana. Profitability, defined as proxy of financial performance, is one of the main objectives of insurance companys.
It adopted the longitudinal time dimension, specifically, the panel method and ordinary least square regression. Policy makers of insurance companies to access current policies and also can adjust management mechanisms to achieve profitability. Malik also investigate the performance of insurance companies of pakistan 8. This paper investigates the determinants of financial performance of general islamic and conventional insurance companies in. The sample size consisted of nine insurance companies operating from 2005 to 2012.
Investigation of determinants of corporate performance has received much attention of. The financial performance of insurance companies is also relevant within the macroeconomic context since the insurance industry is one of the. On the determinants of profitability of indian life insurers. Methodology the study adopted a descriptive research design. The aim of this research is to examine the determinants of profitability performance of selected insurance companies in ethiopia. The nonbank financial sector is less developed in albania than the banking one. There are many factors to consider when looking at insurance companies. The financial performance of insurance companies is also relevant within the. Business performance has attracted researchers attention in the literature of corporate finance over the past decades. On the determinants of profitability of indian life. The study used secondary data for the four financial periods, 20092012. His findings were that capital structure, innovation and ownership structure are determinants of financial performance. Risk management and performance in insurance companies.
Financial performance is measured through return on assets and eight independent variables such as leverage ratio, liquidity, age, size, underwriting risk, retention ratio, tangibility and volume of capital used for this study. Review of literature relevant earlier studies relating to the determinants of profitability financial performance of insurance firms are as follows. Financial institutions serve as the lifeblood of the economy by facilitating the flow of capital. Actually into the albanian insurance market operate eight nonlife insurance companies which are. The financial analysis of a company is an important tool used by actuaries in the process of decision making on underwriting and investment activities of the insurance company. Dec 21, 2014 according to experts of the insurance sector in 2011 was difficult for insurance companies. Determinants of profitability of life insurers in india panel. The researcher compares two insurance industries, analysis possible determinants of financial performance during global financial crisis, collected 24 insurance. Determinants of profitability of life insurers in india. Secondary data on financial reports were collected from sixteen insurance firms in ghana for the period 2005 to 2010. The determinants of financial performance in the romanian. The determinants of financial health of asian insurance companies.
Romanian insurance market are the financial leverage in insurance, company size, growth of. The profitability of insurance companies can also be appraised at the micro, meso, and. Factors affecting performance of commercial banks in albania. In the insurance business, capital is referred to as surplus. Profitability ratios were used as proxy of fin performance. Abstract this study aims to determine factors affecting the financial performance of insurance companies in ethiopia. There are several ways that financial performance is measured, including return on assets, return on equity, gross margin rate.
First, the researcher investigated the determinants of financial performance of insurance companies of usa and uk during global financial crisis. An empirical analysis of determinants of financial performance of. According to experts of the insurance sector in 2011 was difficult for insurance companies. By using ols estimation method to measure the effect of internal and external determinants on financial performance in terms of return on asset.
Whereas internal factors focus on an insurer s specific characteristics, the external factors concern both industry features and macroeconomic variables. Surplus is required for insurance companies to have collateral for outstanding policies. The results showed,leverage, liquidity, size, management competence index have a positive statistical effect on the financial performance of jordanian insurance companies. Successful operation of the industry sets impetus for other industries and development of an economy.
The researchers used only secondary data type from selected insurance companies, viz. Determinants of profitability of insurance firms in ghana. University of nairobi unpublished master of science in finance project. The economy as well as insurance industry of usa and uk face decline during last decade. Financial performance variables include widelyused measures embracing levels, growth and variability in profit typically related to assets, investment or owners equity as well as such measures as market value, assets, equity, cash flow, sales and marketbook value. We investigate the determinants of financial performance of uk insurance companies based on their financial strength ratings. Determinants of performance of insurance companies in tunisia.
Determinants of financial performance of insurance companies. Then, the determinants of the performance of life insurance companies in tunisia, on the basis of our selected sample will be dealt with by analyzing the descriptive statistics for the. The main objective of this study was to examine factors influencing performance of the insurance industry in tanzania. A negative linkage between the insurance financial leverage and the insurers financial. Various individual insurance companies dropped to the level, or below, of the bare minimum requirements of solvency capital as stated by the dutch central bank. Berteji and hammami studied determinants of the performance of the life insurance companies in tunisia, similarly boadi et al. Determinants of profitability performance of insurance.