Determinants of profitability of life and non-life insurance companies: evidence from Ecuador

Camino‐Mogro, Segundo; Bermúdez-Barrezueta, Natalia

doi:10.1108/ijoem-07-2018-0371

Cited by 25 publications

(16 citation statements)

References 90 publications

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“…Applying the chosen model in the observed period, we have realised that the growth of market share has a positive impact on ROA (hypothesis 8), but it is not statistically significant. The results of Camino-Mogro & Bermúdez-Barrezueta (2019) which analysed the life and non-life insurance market of Ecuador in the period 2001-2017, showed that the life insurance market had a statistically significant negative effect on the profitability of insurance companies.…”

Section: Discussion and Concluding Remarksmentioning

confidence: 99%

Profitability determinants of life insurance companies in the Republic of Serbia

Pjanić¹,

Mitrašević²,

Luković³

2023

Strategic Management

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Background: Based on the results of research on the influence of certain internal and external factors on the profitability of insurance companies in the countries in Europe, America, Asia and Africa in the 21 st century which were published in a significant number of scientific and professional papers, the present study analyses insurance companies in Serbia in the period from 2015 to 2021. We chose this analysis bearing in mind the previous negative experiences and expressed distrust in the financial system, which greatly affected the readiness of policyholders to invest in life insurance products, as well as affecting significantly the development of life insurance in Serbia. Purpose: The aim of the paper is to present the business results of the insurance companies on the Serbian market in the analysed period and to determine which business performance the management of an insurance company should pay attention to in order to ensure positive business results. Study design/methodology/approach: We applied a fixed effects model on the nine selected variables. In the model, return on assets (ROA) is used as a dependent variable, while operating margin, expense ratio, investment ratio, growth rate of written premium of a company, company size, log (financial leverage), log (liquidity ratio), and market share are independent variables. Findings/conclusions: The results of the research indicate that there is a statistically significant and positive impact of operating margin and liquidity ratio on ROA, and statistically significant but negative impact of expense ratio and financial leverage on ROA. Limitations/future research: The limitation of our profitability analysis is that we were unable to analyse the impact of individual life insurance products on profitability. Bearing in mind numerous and significant social and economic changes over the last two years, the directions of our future research will be focused on their impact on the business operation of insurance companies.

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Section: Discussion and Concluding Remarksmentioning

confidence: 99%

Profitability determinants of life insurance companies in the Republic of Serbia

Pjanić¹,

Mitrašević²,

Luković³

2023

Strategic Management

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“…studied on Indonesia, Abdeljawad et al. (2020) studied on insurance companies in Palestine, study evidence from Ecuador Camino‐Mogro and Bermúdez‐Barrezueta (2019), Derbali and Jamel (2018). who studied on Tunisia.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Between 2009 and 2015, the study included data from 30 Ghanaian insurers. According to the findings, While “no premium, no cover” and capital minimum restrictions don't even have a substantial driving effect on profitability, the presence of these restrictions has assisted insurers mitigate the adverse impact of liquidity and underwriting risks on economic performance (Camino‐mogro & Bermúdez‐Barrezueta, 2019). This article aims to define the critical indicators of life and general insurance profitability to acquire which factors impact the Ecuador insurance industry in each sector.…”

Section: Literature Reviewmentioning

confidence: 99%

What determines the financial performance micro or macro antecedents: A case of Indian general insurance

Sasidharan¹,

Ranjith

Prabhuram³

2022

J Corp Accounting Finance

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The insurance industry is vital to any economy, particularly a country's financial market. The attempt to investigate the economic performance of the insurance firms is due to a lack of empirical research in the general insurance sector in India on the economic performance of insurance organizations concentrating on firm-specific and external aspects. Therefore, the Insurance companies in India were studied using econometric panel data of 21 firms for ten years, from 2010-2011 to 2019-2020. Firm-specific factors (firm size, financial leverage, retention ratio, liquidity, premium growth rate, loss ratio, re-insurance dependence, and macroeconomic factors (market share, GDP per capita, and inflation) are included in the model. Findings revealed that retention ratio, premium growth, and market share significantly positively affect the ROA while, on the other hand, loss ratio, liquidity, and inflation significantly negatively affect the profitability (ROA). Other factors, including size, re-insurance dependence, leverage ratio, and GDP per capita, have no significant impact on insurance firms' profitability (ROA). Furthermore, the variables that significantly affect the performance in terms of ROE are financial leverage and market share, holding a positive impact.And firm size shows an inverse relationship with ROE.

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“…Despite the presence of works studying efficiency levels in the insurance industry in recent years (Camino-Mogro & Bermúdez-Barrezueta, 2019 ; Nguyen & Worthington, 2020 ), they do not further investigate the effect of technological change. In the light of previous results, showing a moderate efficiency in the industry and of recent technological innovations with the potential to change the industry (Eling & Lehmann, 2018 ), in particular in the country mostly affected by innovative technological applications in insurance [i.e.…”

Section: Literature Reviewmentioning

confidence: 99%

Translating technological innovation into efficiency: the case of US public P&C insurance companies

Lanfranchi

Grassi

2021

Eurasian Bus Rev

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In recent years, Insurtech innovations, driven by technologies such as artificial intelligence and blockchain, emerged in the insurance industry, with the promise of improving efficiency. However, while the positive impact of technology on insurance companies’ efficiency is expected, literature assessing it empirically is scarce, when it comes to recent technological change. Focusing on the US public P&C insurance sector in the period 2012–2018 and relying on both nonparametric (two stage DEA) and parametric (SFA) approaches, it emerges that on average insurance companies were not able to leverage on technological innovations to improve their efficiency. On average a relative level of efficiency among companies, according to a two stage DEA model, was quite stable in time, while the SFA approach shows that the distance between efficient and less efficient firms slightly increased. Moreover, we found one very efficient firm, almost a leader of the market in terms of efficiency, and a homogeneous group of followers, indicating that there is vast scope for improvement for less efficient companies. Nevertheless, even the most efficient company impaired its efficiency over time, suggesting that neither the leader nor on average the followers properly leveraged technology to improve their efficiency. In a competitive scenario, with new players’ entrance and fierce competition, inertia may seriously affect their positioning. Academicians, managers and policymakers should carefully consider the effects that a non-improvement of efficiency following technological change may have on market structure, competition and regulations, potentially opening to further discussion on how technological innovations adoption should be facilitated.

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Determinants of profitability of life and non-life insurance companies: evidence from Ecuador

Cited by 25 publications

References 90 publications

Profitability determinants of life insurance companies in the Republic of Serbia

Profitability determinants of life insurance companies in the Republic of Serbia

What determines the financial performance micro or macro antecedents: A case of Indian general insurance

Translating technological innovation into efficiency: the case of US public P&C insurance companies

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