LITERATURE REVIEW ON THE DETERMINANTS OF INSURERS’ FINANCIAL PERFORMANCE

Abstract

The main objective of our paper is to analyze the profitability of insurance companies and to determine the factors that influence it. In this regard, we have analyzed and compared fifteen articles from the literature on the performance of insurance companies. The first step in our research was to go through each of the scientific articles. Then, following certain aspects, we created a database with the information of interest for each of the fifteen articles analyzed. The information gathered helped us to make a comparison between them. Most articles focus on determining the factors that influence the profitability of general insurance. Ten of the fifteen articles have as a dependent variable of multiple regression the return on assets. As far as independent variables are concerned, company size and financial leverage are the most used and the most significant from a statistical point of view. In general, the most appropriate model of multiple regression is the fixed effects model. The main sources of data used by the authors in their research are the annual reports of the insurance companies, that include financial statements such as the balance sheet and the profit or loss account, annual reports or databases of insurance regulatory and supervisory authorities, National Banks or company websites.

Keywords

• profitability
• determinants
• insurance
• analysis