Factors Influencing the Financial Performance of Non-Life Insurance Companies of Pakistan

Umair Saeed and Nouman Khurram

International Journal of Empirical Finance, 2015, vol. 4, issue 6, 354-361

Abstract: Today insurance industry is being built-in into vast pecuniary sector and it acts as a vital sector for Pakistan’s economy. To maximize the wealth of owners is one of the key objectives of management of any company and it is desired by management to work for profit maximization of the organization. Current study scrutinizes the influences of precise estimators of organization (Size of firm, loss ratio, expense ratio, debt ratio, growth of premium and age of firm) on performance deputations by return on assets a measure of the profitability. To find the impact of firm’s specific factors on their return on asset the data is gathered from 24 non-life insurance companies of Pakistan from the period 2005-2013. The panel data techniques are employed to measure the impact on performance of non-life insurance companies. To extract their impact Hausman test is employed to decide whether fixed or random effect model is appropriate. The test guided us that fixed effect model is apt for current study. The findings of fixed effect model put forward that age and loss ratio proves significant in determining performance of non-life insurance companies of Pakistan. Present study is multipurpose for the administration of Pakistan’s insurance sector in shaping their future decision making process.

Keywords: Non-life Insurance companies; Pakistan; Performance; Firm Specific Factors (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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