Corporate Governance and Financial Performance of Insurance Companies in Nepal

Maharjan, Rajendra

doi:10.3126/irjms.v4i0.27888

Cited by 3 publications

(6 citation statements)

References 22 publications

(11 reference statements)

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“…In contrast, ROA and ASize(5) underestimate RE (−6.3918) and relate negatively at 10% significance, thus rejecting Hypothesis 4. This supports the findings of Maharjan (2019), Fadun (2013), andFekadu (2015). This means that below ASize(4), there is no effect on insurance performance, while there is a positive effect on insurance performance when there are four members.…”

Section: Resultssupporting

confidence: 87%

“…The audit committee's role is to enhance firm value. Maharjan (2019), Fadun (2013), andFekadu (2015) all found a positive relationship between audit committee size and financial performance. In contrast, Datta (2018), Ghabayen (2012), Yemane et al (2015), and found that audit committee size does not affect firm performance.…”

Section: Audit Committee Sizementioning

confidence: 92%

“…In contrast, in a study on non-financial firms in the Saudi market, Ghabayen (2012) found that board composition had a significant negative relationship with firm performance. Similarly, in Nepal, looking at 2011 to 2018, Maharjan (2019) found that board size and CEO duality were negatively associated with financial performance. Meanwhile, Shaheen and Jaradat (2019) found that, in Palestine, firms that hold more frequent board meetings and have CEO duality achieved better performance.…”

Section: Board Composition and Board Independencmentioning

confidence: 94%

“…Although few studies have been conducted on the insurance industry in developed economies, extant studies, such as Elamer et al (2018) in the UK and Eckles et al (2011) in the US, have examined the relationship between corporate governance and firm performance. However, there are several studies on the insurance industry in developing economies; for example, in Nigeria (Ajemunigbohun et al 2020;Akeem et al 2014;Azutoru et al 2017;Fadun 2013;Fodio et al 2013;Gugong et al 2014), Ethiopia (Fekadu 2015;Yemane et al 2015), Kenya (Wanyama and Olweny 2013), Ghana (Tornyeva and Wereko 2012), Nepal (Maharjan 2019), Palestine (Shaheen and Jaradat 2019), India (Chaudhary 2014), Taiwan (Huang et al 2007), Sri Lanka (Panditharathna 2016), Bangladesh (Datta 2018), Pakistan (Arif 2019), and Bahrain (Najjar 2012).…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

See 3 more Smart Citations

Do Publicly Listed Insurance Firms in Saudi Arabia Have Strong Corporate Governance?

Al‐Faryan

Alokla

2023

Economies

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Saudi Arabia has now opened its markets to foreign investors in line with its strategy to diversify its economy. However, investors need to feel confident that Saudi enterprises are being monitored and regulated appropriately. This study identifies the impact of improvements in Saudi corporate governance practices among insurance firms. The effects of corporate governance on the financial performance of 35 insurance firms listed on the Saudi stock market are examined from 2008 to 2014, including Shariah-compliant and life insurance firms. Four different methodologies are used: the generalised least squares random effect, fixed effect models, a difference-in-differences (DID) measurement for comparisons, and the probit model with average marginal effect to address endogeneity. The results indicate that firm performance is affected by information asymmetry. The 2009 exogenous shock from the Saudi regulatory change to board composition and audit committee size shows a positive effect on performance in the DID comparison. However, an increase in independent board and audit committee members has a significant negative effect. Other findings indicate that an increase in CEO (Chief Executive Officer) age has a positive effect on performance, as do three pay variables (director incentives, CEO and top executive pay, and above-the-mean director incentives). However, when CEO and top executive pay increases above the mean, the effect turns negative; this also happens with a change in CEO from poor performance. The results support the importance of Saudi insurance industry corporate governance regulation and reflect the improved governance perspectives of the Saudi Capital Market Authority and Saudi Arabian Monetary Agency.

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Section: Resultssupporting

confidence: 87%

Section: Audit Committee Sizementioning

confidence: 92%

Section: Board Composition and Board Independencmentioning

confidence: 94%

Section: Literature Review and Hypothesesmentioning

confidence: 99%

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Do Publicly Listed Insurance Firms in Saudi Arabia Have Strong Corporate Governance?

Al‐Faryan

Alokla

2023

Economies

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“…For this, a convenient sampling technique has been used for the selection of the sample, and data were analyzed using a multiple linear regression model. Similarly, Maharjan (2019), andGhimire (2020) examine the relationship between corporate governance and the performance of the insurance companies in Nepal with having the effect of corporate governance practice on the financial performance of insurance companies in Nepal.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of National Election-2017/18 on Corporate Performance: An Analysis of Insurance Companies in Nepal

Oli

2023

Interdis. J. Innov. Res. Nep. Acad.

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This paper analyzes the impact of the national election on corporate performance by using panel data from listed insurance companies over the period 2015 to 2021 with 126 observations. The proxy variables of corporate performance have used market price per share (MPS), dividend payout ratio (DPS), and return on assets (ROA) for market performance, investor’s performance, and firm’s performance respectively. This study uses the generalized least squared (GLS) method for the final impact assessment. Empirical analysis shows that the beta coefficient of D-election is significantly negative with all performance proxy variables in random effect estimates. This indicates that there is a random effect of the national election on corporate performance and provides a negative impact on corporate performance after the national election-2017-18. Similarly, analysis of fixed effects also support a similar impact except for the DPS because DPS is not significant. For the robust test, this paper has performed the Breusch-Pagan test and Hausman test which supports consistency of the analysis. Overall analysis suggests that the four levels of elections: local level, provincial level, federal level, and national assembly election do affect adversely the corporate performance of insurance industries in Nepal.

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Determinants of financial performance in Nepalese nonlife insurance companies: A panel data analysis

Mani Upadhyaya,

Ghimire,

Raj Ghimire

2023

Insurance Markets and Companies

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The financial performance of insurance companies plays a fundamental role in driving the overall economy towards economic development and progress. The study aims to examine the impact of financial performance indicators on the Return on Equity (ROE) and Return on Assets (ROA) of nonlife insurance companies. In the methodology of study, 13 nonlife insurance companies have been considered, and panel data have been analyzed for a 14-year period (2008–2021). The fixed effects model was estimated using the E-Views software package. The panel data analysis results point to a noteworthy and favorable impact on ROA, explaining 92.75% of its variance. The results show that there is a strong positive relationship between ROA and four key factors: gross premium, retention ratio, expense ratio, and combined ratio. This underscores the importance of enhancing elements like gross premium, retention ratio, expense ratio, and combined ratio to elevate ROA. The conclusion of the study provides useful insights for improving the financial performance and competitiveness of nonlife insurance companies in Nepal. The study reveals the key success factors that affect the profitability and efficiency of the insurance sector. This suggests that nonlife insurance companies in Nepal can improve their profitability by focusing on increasing their gross premium, retention ratio, reducing expense ratio, and decreasing combined ratio. The findings have important implications for enhancing the performance and competitiveness of the nonlife insurance sector in Nepal.

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Corporate Governance and Financial Performance of Insurance Companies in Nepal

Cited by 3 publications

References 22 publications

Do Publicly Listed Insurance Firms in Saudi Arabia Have Strong Corporate Governance?

Do Publicly Listed Insurance Firms in Saudi Arabia Have Strong Corporate Governance?

Impact of National Election-2017/18 on Corporate Performance: An Analysis of Insurance Companies in Nepal

Determinants of financial performance in Nepalese nonlife insurance companies: A panel data analysis

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