Profitablity of Insurance Corporations: An Analytical Study on Select Private Insurance Companies of Ethiopia

International Journal of Economics and Management Studies

© 2019 by SSRG - IJEMS Journal

Volume 6 Issue 5

Year of Publication : 2019

Authors : Dr. Alaparthi.Maruthi Varaprasad , Dr. Kota Madhusudhana Rao

10.14445/23939125/IJEMS-V6I5P102

How to Cite?

Dr. Alaparthi.Maruthi Varaprasad , Dr. Kota Madhusudhana Rao, "Profitablity of Insurance Corporations: An Analytical Study on Select Private Insurance Companies of Ethiopia," SSRG International Journal of Economics and Management Studies, vol. 6,  no. 5, pp. 5-11, 2019. Crossref, https://doi.org/10.14445/23939125/IJEMS-V6I5P102

Abstract:

Insurance is one of the major risks mitigating mechanism in modern economy. The existence andsurvival of financially strong Insurance Companies is therefore inevitable. For Insurers to bereliable and financially sound, their profitability and most importantly knowing what factorsmakes them profitable is very crucial objective. In order to achieve this objective, this study used quantitative research approach using Panel data covering ten-year period from 2006–2015 for nine insurance companies. The study uses linear regression model to see the effect ofindependent variables, which were the factors under study, on dependent variable profitability proxied by ROA. Data was analyzed with stata software 32.The findings of the study showedthat Size of company, Loss ratio and leverage have statistically significant relationship withinsurers’ profitability. Therefore; the study recommends that Ethiopianinsurance companies should give due consideration to these factors to appropriately addressprofitability issues.

Keywords:

Ethiopian Insurance Companies, Insurance, Profitability

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