Impact of premium collection on investment pattern of Nepalese life insurance companies (original) (raw)
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Factors affecting the profitability of Nepalese insurance companies
Nepalese Journal of Insurance and Social Security, 2021
This study examines the factors affecting profitability in the context of Nepalese insurance companies. Return on assets and return on equity are selected as the dependent variables. The selected independent variables are liquidity, tangibility, premium growth, firm age and firm size. The study is based on secondary data of 21 insurance companies with 168 observations for the period from 2011/12 to 2018/19. The data is collected from the reports published by Beema Samiti and Annual Reports of selected insurance companies. The regression models are estimated to test the factor affecting the profitability of Nepalese insurance companies. The study showed that firm size has a positive impact on return on assets and return on equity. It indicates that larger firm size leads to increase in return on assets and return on equity. Likewise, premium growth has a positive impact on return on assets and return on equity. It indicates that higher the premium growth, higher would be the return o...
Determinants of financial performance in Nepalese nonlife insurance companies: A panel data analysis
Business Perspectives, 2023
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 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.
DETERMINANTS OF INSURANCE COMPANIES PROFITABILITY: ANALYSIS OF NON-LIFE INSURANCE COMPANIES IN NEPAL
The research paper aims to assess the relationship between financial performances with company size, liquidity, leverage and underwriting risk of non-life insurance companies in Nepal with ten years published data from five nonlife insurance companies in Nepal. The descriptive and analytical research design is adopted in the research. The cause and effect relationship is analyzed through the employment of regression and correlation analysis. The whole observation is fifty firm-years observations. The correlation, multiple regression analysis and F-statistic are accustomed to determine the relative importance of variables in influencing financial performance. The study concludes that the sizes of the non-life insurance companies have significant positive impact on non life insurances' profitability. The liquidity fluctuations don't have impact on the performance of non life insurance companies in Nepal. The non-life insurance companies with upper leverage have shown lower financial performance. The study further concludes that whatever changes in benefits paid and net premium, non-life insurance companies ROA would haven't any changes. The dimensions of non depository financial institutions and leverage are the foremost variables to influence the financial performance of the non-life insurance companies in Nepalese context
Factors Affecting Profitability of Nepalese Non-Life Insurance Companies
Journal of Nepalese Business Studies
The study examines the impacts of liquidity ratio, leverage ratio, firm size, age of the firm and total debt on the profitability of non-life insurance companies in Nepal. The dependent variable in the study is the return on asset (ROA), which is used as a measure of profitability. The study is based on secondary data of nine non-life insurance companies studied over a period of ten years, from 2066/67 to 2075/76. The data were collected from the financial statements published annually by the selected non-life insurance companies. Descriptive statistics, correlational analysis and regression models have been employed in order to test the impacts as well as the significance of the selected independent variables on ROA. The study concludes that the profitability of Nepalese non-life insurance companies increases with the increase in liquidity but decreases with the increase in leverage. However, the study establishes the insignificant relationship of firm size, firm age and total debt...
Impact of Firm Specific Factors on Financial Performance of Life Insurance Companies in Nepal
Interdisciplinary Journal of Management and Social Sciences, 2020
The financial performance of life insurance companies determines the company’s ability to generate revenues and manage assets, liabilities and the financial interests of its stakeholders. However, there are limited studies discoursing major determinants of companies’ financial performance. To fulfill the gap, this study aimed to determine the effects of various firm-specific factors - firm size, liquidity ratio, short-term debt, long-term investment and firm age - on financial performance of life insurance companies in Nepal. The dependent variables influencing financial performance considered were return on assets (ROA) and return on equity (ROE). The study was based on secondary data of seven life insurance companies studied over a period of ten years, from 2009/10 to 2018/19. The data were collected from the financial statements published annually by the selected life insurance companies, Insurance Board of Nepal and Nepal Stock Exchange. In order to derive the impacts of firm-sp...
Determinants of Profitability of Insurance Companies in Nepal
Patan prospective journal, 2023
The ability of a corporation to turn a profit from all of its business endeavors is expressed by its profitability. It demonstrates how well management uses all available resources to generate profit. This study attempts to investigate the determinants of profitability of insurance companies in Nepal. This study is based on secondary data of 15 sample insurance companies using convenient sampling and it covers the period 2016/17 to 2020/21 with 75 observations. The results of this study revealed that expense ratio, financial leverage, claim ratio and size of company have impact on profitability of the insurance companies in Nepal. Expense ratio and claim ratio have significant negative and financial leverage and size of company have positive impact on profitability of the insurance companies in Nepal. This study also revealed the insignificant effect of age on profitability of insurance companies.
Investment Determinants in the Life Insurance Sector: A Study of Life Insurance Corporation of India
isara solutions, 2022
The Life Insurance Corporation of India (LIC), one of the country's largest and oldest insurance companies, serves a vital role in protecting the financial interests of millions of individuals and families. As a pillar of India's financial sector, LIC's investment decisions have significant economic and social implications. This research study conducts an in-depth analysis of the determinants of LIC investment from 2010-11 to 2019-20. It applies a linear regression model to examine the relationship between the major independent variables, which include, Premium, Commission, Operating Expenses, and Claims, and the dependent variable, Investment. The primary objective of this research is to shed light on the factors that drive LIC's investment choices, providing useful insights into the organization's financial dynamics. The study reveals that while claims and operating expenses have a favorable influence on investment, commission has a negative effect. However, Premium has a minimal impact, indicating other factors may be more significant. This research emphasizes the critical role of financial determinants in guiding LIC's investment decisions, highlighting the multiple changes affecting India's life insurance business and equipping stakeholders with the means to navigate this complex environment.
Journal of Business & Economic Policy, 2022
The present study is to analyze and compare the profitability position of public and private life insurance companies in India over a period of five years from 2016 to 2020. To measure and compare the profitability operating expense ratio, investment income to premium ratio, investment yield, insurance margin and return on net worth have been used. In order to the test hypotheses and to conclude the statistical results T-Test has been used. Investment Income to Premium and Insurance Margin of Life Insurance Corporation of India significantly differs from those of private life insurance companies in India. However, there is no significant difference between public and private life insurance companies with reference to Incurred Claim Ratio, Combined Ratio and Investment Yield. This research can be used by insurance sectors to monitor the profitability position of their own as well as to take necessary measures to improve it.
Proceedings of the Annual International Conference on Accounting Research (AICAR 2019), 2020
The objective of this research was to examine and analyse the influence of Net Premium Growth, Claim Ratio and Risk Based Capital affect the Financial Performance of Line Insurance Companies. The study population was insurance companies listed on the Indonesia Stock Exchange from 2014-2018. The sample used in this study were 17 life insurance companies. The statistical tool in this study is Eviews 11. Net Premium Growth and Claim Ratio do not significantly influence financial performance. Risk Based Capital has a negative effect on the financial performance of life insurance, namely ROA. Simultaneously the three ratios of Net Premium Growth, Claim Ratio and Risk Based Capital affect the financial performance of life insurance companies that are proxied by ROA. The implication of this research is that life insurance companies are expected to be able to maintain the stability of premium growth every year to be above the normal limit of 23%.
Determinants of Insurance Investment: A case study of Life Insurance Corporation of India
ELK Asia Pacific Journal of Finance and Risk Management, 2015
Indian insurance markets have changed radically and deeply in the last countable years. Deregulation, globalization of insurance institutions, intensified competition, electronic commerce, bancassurance, and the emergence of new risks are among the challenges confronted by insurance markets. These trends pose both global and local challenges for insurance firms as key advancement in insurance and financial services markets influence insurance markets on a global scale. The paper endeavoured to link insurance investment decisions with underwriting activities of insurance companies.Although, underwriting and investment are two important and related business activities of insurance companies, impact of underwriting activities on investment for life insurers has not been rigorously examined in the literature. Using a sample of public life insurer, this article conducts an empirical investigation of how underwriting impact investment in the period of 2001–2014. The result of study suggests that premium and claim is significantly influenced the investment of insurance sector. In the aftermath of expanding liberalization in the insurance industry together with the worldwide financial crisis has posed a great deal of challenges for insurance regulatory authorities in monitoring investment of insurance companies.Researcher believes the current paper provides some helpful bits of knowledge in this vein.