Capital Structure of Non-life Insurance Firms in Japan

Mahito Okura and Satoru Yamaguchi

Applied Economics and Finance, 2016, vol. 3, issue 3, 45-49

Abstract: This research investigates the debt to equity ratio (D/E ratio) in non-life insurance firms in Japan through empirical analysis and offers several main findings. First, the solvency margin ratio has a negative effect on the D/E ratio. Second, neither the Return on Equity (ROE) nor the combined ratio has an impact on the D/E ratio. Third, the expense ratio has a positive effect on the D/E ratio, while the loss ratio does not. The second and third results imply that the expense ratio is the most suitable index for measuring profitability in Japan¡¯s non-life insurance firms when the D/E ratio is being considered.

Keywords: capital structure; debt to equity ratio; non-life insurance; Japan (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:rfa:aefjnl:v:3:y:2016:i:3:p:45-49

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