Factors Affecting Financial Performance of Insurance Industry in Pakistan

doi:10.7176/rjfa/10-5-03

Cited by 5 publications

(5 citation statements)

References 6 publications

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“…It indicates that gross domestic product has a positive impact on return on equity. This finding is also similar to the findings of Shawar & Siddiqui (2019). Likewise, the beta coefficients for money supply are negative with return on equity.…”

Section: Regression Analysissupporting

confidence: 88%

“…Similarly, Hasan et al (2018) concluded that the macroeconomic variables (GDP growth rate) have statistically positive significant influence on the performance of non-life insurance companies. Furthermore, Shawar & Siddiqui (2019) found that the gross domestic product have an insignificant but positive relationship with profitability of the insurance industry. In additional, Meher & Zewudu (2020) found that there is the positive relationship between the gross domestic product and profitability of the insurance company.…”

Section: Gross Domestic Productmentioning

confidence: 99%

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Effect of firm specific and macroeconomic factors on profitability of Nepalese insurance companies

Khadka¹

2023

Lumbini J. Bus. & Econ.

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This study examines the effect of firm specific and macroeconomic factors on profitability of Nepalese insurance companies. Return on asset and return on equity are selected as the dependent variables. Similarly, firm size, liquidity, tangibility, dividend per share; premium growth, inflation, gross domestic product and money supply are selected as the independent variables. This study is based on secondary data of 16 insurance companies with 124 observations for the study period from 2013/14 to 2020/21. The data were collected from collected from reports published by the insurance board of Nepal, annual reports of respective insurance companies and World Bank database. The correlation coefficients and regression models are estimated to test the significance and importance of firm specific and macroeconomic factors on the profitability of Nepalese insurance companies. The result showed that firm size have the negative impact on return on assets and return on equity. It indicates that the increase in the firm size leads to decrease the return on assets and return on equity. Similarly, the studies showed that liquidity rate have also the negative impact on return on assets and return on equity. It indicates that the increase in the liquidity leads to decrease the return on assets and return on equity. On the other hand, the studies found that tangibility have the positive impact on return on assets and return on equity. It shows that the increase in the tangibility leads to increase the return on assets and return on equity. Likewise, the studies found that dividend per share have the positive impact on return on assets and return on equity. It shows that the increase in the dividend per share leads to increase the return on assets and return on equity. Similarly, the studies found that premium growth have the positive impact on return on assets and return on equity. It shows that the increase in the premium growth leads to increase the return on assets and return on equity. Furthermore, gross domestic products have the positive impact on return on assets and return on equity. It means that increase in the gross domestic product have leads to increase the return on assets and return on equity. Moreover, inflation has the negative impact on return on assets and return on equity. It shows that increase in the inflation leads to decrease the return on assets and return on equity. Likewise, money supply has the negative impact on return on assets and return on equity. It indicates that the increase in the money supply leads to decrease the return on assets and return on equity of Nepalese insurance companies.

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Section: Regression Analysissupporting

confidence: 88%

Section: Gross Domestic Productmentioning

confidence: 99%

Effect of firm specific and macroeconomic factors on profitability of Nepalese insurance companies

Khadka¹

2023

Lumbini J. Bus. & Econ.

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“…These predictions, however, are referred to as "technical models" in the insurance industry, as they do not take into account other external factors including inflation, regulatory constraints, and practices followed to insure customer retention. Factors such as expenses, investments, reinsurance, and other model adjustments and regulatory constraints assist in arriving at the final premium amount Tsvetkova et al (2021); Shawar and Siddiqui (2019). Developing the best possible "technical models" is essential for an insurance company to enable the prediction of appropriate insurance premiums Guelman (2012), and this is the focus of this paper.…”

Section: Introductionmentioning

confidence: 99%

A Comparison of Generalised Linear Modelling with Machine Learning Approaches for Predicting Loss Cost in Motor Insurance

Wilson,

Nehme,

Dhyani

et al. 2024

Risks

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This study explores the insurance pricing domain in the motor insurance industry, focusing on the creation of “technical models” which are essentially obtained after combining the frequency model (the expected number of claims per unit of exposure) and the severity model (the expected amount per claim). Technical models are designed to predict the loss costs (the product of frequency and severity, i.e., the expected claim amount per unit of exposure) and this is a main factor that is taken into account for pricing insurance policies. Other factors for pricing include the company expenses, investments, reinsurance, underwriting, and other regulatory restrictions. Different machine learning methodologies, including the Generalised Linear Model (GLM), Gradient Boosting Machine (GBM), Artificial Neural Networks (ANN), and a unique hybrid model that combines GLM and ANN, were explored for creating the technical models. This study was conducted on the French Motor Third Party Liability datasets, “freMTPL2freq” and “freMTPL2sev” included in the R package CASdatasets. After building the aforementioned models, they were evaluated and it was observed that the hybrid model which combines GLM and ANN outperformed all other models. ANN also demonstrated better predictions closely aligning with the performance of the hybrid model. The better performance of neural network models points to the need for actuarial science and the insurance industry to look beyond traditional modelling methodologies like GLM.

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“…The sustainability and profitability of insurers is vital given the benefits they provide to society and the nation. A well-developed insurance sector reinforces the country's economic system by mitigating the growing financial crisis (Shawar and Siddiqui, 2019).…”

Section: Introductionmentioning

confidence: 99%

Enhancing Investment Performance and Sustainability in the Maldives Insurance Industry

Sulaiman

2024

IJMAR

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The role of the insurance industry in national economic stability is indispensable, particularly in developing nations like the Maldives. Despite substantial potential, the industry's penetration levels remain below desired thresholds. This research aims to investigate the performance of Maldivian insurance companies, focusing on investment-related aspects. Drawing from existing literature on global insurance sectors, the study formulates hypotheses and employs multiple regression and qualitative analysis on primary data from the Maldives insurance industry. The findings suggest a collective influence of various factors on the financial performance of the sector. Additionally, the study explores preferred investment instruments over different time durations and identifies challenges hindering optimal investment returns. The research provides recommendations for stakeholders to enhance the investment climate, fostering sustainability and collaborative initiatives within the industry.

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Factors Affecting Financial Performance of Insurance Industry in Pakistan

Cited by 5 publications

References 6 publications

Effect of firm specific and macroeconomic factors on profitability of Nepalese insurance companies

Effect of firm specific and macroeconomic factors on profitability of Nepalese insurance companies

A Comparison of Generalised Linear Modelling with Machine Learning Approaches for Predicting Loss Cost in Motor Insurance

Enhancing Investment Performance and Sustainability in the Maldives Insurance Industry

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