Impacts of Insurers’ Financial Insolvency on Non-Life Insurance Companies’ Profitability: Evidence from Bangladesh

Siddik, Md. Nur Alam; Hosen, Md. Emran; Miah, Md. Firoze; Kabiraj, Sajal; Joghee, Shanmugan; Ramakrishnan, Swamynathan

doi:10.3390/ijfs10030080

Cited by 6 publications

(3 citation statements)

References 28 publications

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“…NL moderated by ROL in surrounding countries has decreased the EG of local countries by 2.1 percent as the only significant result. Due to inappropriate policies, the non-life insurers' financial insolvency and lower profitability may discourage the companies' growth (Siddik et al 2022;Pavia et al 2021). When considering the short-run direct impact of NL across countries on EG, there was a direct impact by PSV, which is 4.1 percent.…”

Section: Results On the Spatial Impact Of Institutions And Non-life I...mentioning

confidence: 99%

Insurance Penetration and Institutional Spillover on Economic Growth: A Dynamic Spatial Econometric Approach on the Asian and Europe Region

Fernando,

Tharanga,

Dewasiri

et al. 2023

JRFM

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The contemporary environment is interrelated, and interactions between markets, countries, and international actors at different levels exist in every corner of the globe. Amid this, the failures of the free-market system have paved the way for institutionalism, which proposes minimising transaction costs, substantial property rights, and enabling proper contract enforcement. Studies on institutions and insurance development spillover concerning growth relationships are rare and a critical area needing exploration. This study explores the behaviour of economic development in terms of potential spatial dependencies and spatial institutional and insurance development spillover on economic growth. To measure insurance development by the life insurance and non-life insurance penetration, economic growth by per capita gross domestic product (GDP), and indicators of good governance for institutions in the nations. The study explored the spatial impact between countries using panel data of 56 countries between 2002 and 2020 representing the Asian and European regions. We did this by using dynamic spatial econometric modelling (DSEM) on institutional and insurance development and seeing the spatial implications and the spatial institutional impact moderated by insurance development on growth. Results indicate that developing the life insurance and non-life insurance of surrounding countries creates a spillover impact on the local countries’ economies. In contrast, institutions have created a reverse spatial spillover impact on local countries. However, life insurance development, moderated through accountability and government effectiveness, has created a spatial spillover between countries. Both life and non-life penetration moderated by the control of corruption and overall institutions have shown a reverse spillover on countries’ economies. This suggests that global governance is a positive-sum game, and monitoring and governance structures have failed at the international level concerning separate countries. Therefore, it is seen that to prevent institutional failure at the state level, good governance and links with the global governance structure could disrupt or energise local institutions.

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Section: Results On the Spatial Impact Of Institutions And Non-life I...mentioning

confidence: 99%

Insurance Penetration and Institutional Spillover on Economic Growth: A Dynamic Spatial Econometric Approach on the Asian and Europe Region

Fernando,

Tharanga,

Dewasiri

et al. 2023

JRFM

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“…The result revealed that inflation is positive and statistically significant for the financial health of non-life insurance companies (Siddik et al, 2022). A negative inflation rate can be detrimental to capaccumulation (Chen et al, 2020).…”

Section: Inflationmentioning

confidence: 94%

Determinants of operational efficiency on the financial health of non-life insurance companies in South Africa

Ige-Gbadeyan,

Johannes Swanepoel

2023

Insurance Markets and Companies

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This study aimed to determine the effect of operational efficiency on financial health of non-life insurance companies in South Africa. Operational efficiency refers to an insurer’s ability to deliver its services while minimizing costs and maximizing profitability. A descriptive research design was used to achieve the objective of this study. The panel data from 2008–2019 used secondary data sourced from S&amp;P Capital Q and Refinitiv Eikon, well-known databases with readily available data. The population of this study focuses on 32 non-life insurance companies with measurable markets of 57 domestic non-life insurance providers in South Africa. Data were analyzed using Fixed-effect regression, (Random-effect GLS regression, correlation, and the Hausman test. The result reveals that of all the variables, only premium growth correlates significantly (negative correlation) with financial health. This could be a result of a specific investment that resulted in a lower rate than that of a risk-free security. It is also important to note that a negative premium does not always indicate a problem. This can happen due to cancellations of reinsurance, reinsurer closures, paid off reinsurance ahead of time, under- pricing policies, inadequate reserves, high claim frequency, operational inefficiencies, investment losses, inadequate risk assessment, economic downturn, regulatory changes, catastrophic event, and any other events. It is essential for non-life insurance companies to carefully manage their underwriting practices, risk assessment, pricing strategies, and investment portfolios to avoid negative premium situations and maintain financial health.

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“…From the results of this study, it can be concluded that the increase in production costs such as raw materials, labor wages, or property rent is not followed by an increase in company income projected from the return on asset ratio. According to (Siddik et al, 2022) shows that inflation has a significant negative effect on return on equity. Unexpected inflation rates affect costs, assets, liabilities, technical provisions and future claim payments that slow down company growth.…”

Section: Inflationmentioning

confidence: 99%

The Effect Of Digitization Transformation On Financial Performance: A Case Study Of Banking Companies In Indonesia

Pertiwi,

Jamaludin,

Wicaksono

et al. 2023

jrssem

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This study aimed to analysis the influence of digital transformation, bank size, CAR, loan & liquidity ratio, NPL, inflation and GDP growth to ROA and ROE with LLP and deposit growth as a control variable. The results of hypothesis testing from this study show that digital transformation, CAR, NPL, inflation, GDP growth and deposit growth have a significant effect on ROA. While bank size, loan ratio, liquidity ratio and LLP do not have a significant effect on ROA. As for the second model shows that digital transformation, bank size, NPL, inflation, GDP growth and deposit growth have a significant effect on ROE. While the CAR, loan ratio, liquidity ratio and LLP do not have a significant effect on ROE.

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Impacts of Insurers’ Financial Insolvency on Non-Life Insurance Companies’ Profitability: Evidence from Bangladesh

Cited by 6 publications

References 28 publications

Insurance Penetration and Institutional Spillover on Economic Growth: A Dynamic Spatial Econometric Approach on the Asian and Europe Region

Insurance Penetration and Institutional Spillover on Economic Growth: A Dynamic Spatial Econometric Approach on the Asian and Europe Region

Determinants of operational efficiency on the financial health of non-life insurance companies in South Africa

The Effect Of Digitization Transformation On Financial Performance: A Case Study Of Banking Companies In Indonesia

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