Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia

Anwar Adem Shikur; Omer Mohammed Ahmed; Mubarek Sadik Hussen

doi:doi:10.11648/j.ijfbr.20220801.14

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Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia

Anwar Adem Shikur, Omer Mohammed Ahmed, Mubarek Sadik Hussen

Published in International Journal of Finance and Banking Research (Volume 8, Issue 1)

Received: 28 December 2021 Accepted: 21 January 2022 Published: 26 January 2022

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Abstract

This study was primarily conducted to investigate influencing factors for insurance companies specifically for private insurance operating in Ethiopia. To attain the objective both industry-specific and macro-economic factors include the ratio of liquidity, leverage, the volume of capital, age of the insurance, underwriting risk, premium growth, market share, inflation, and economic growth. The study included ten insurance companies with operations from 2011 to 2020. Secondary data was collected from the Ethiopian central bank (National Bank of Ethiopia). An explanatory research design with a mixed approach was used for this study. Furthermore, this study employed OLS to estimate a multiple regression model constructed through E-views 10 software after all the necessary diagnostic tests were undertaken. The finding indicates liquidity, firm premium growth, the age of the company, and market share have significant positive effects on insurance profitability. Whereas, underwriting risk, leverage, the volume of capital, and inflation reveal significant but adverse effects on insurance profitability. The study suggests insurances companies adopt different techniques such as improving loss handling mechanisms, assessing and gathering adequate information about the insured before selection, and marketing managers should pay a great deal of attention to maximizing market share through the use of user-friendly information technology for both the insurance and it is customers.

Published in	International Journal of Finance and Banking Research (Volume 8, Issue 1)
DOI	10.11648/j.ijfbr.20220801.14
Page(s)	25-32
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Profitability, Private Insurance Company, Panel, Ethiopia

References

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APA Style

Anwar Adem Shikur, Omer Mohammed Ahmed, Mubarek Sadik Hussen. (2022). Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia. International Journal of Finance and Banking Research, 8(1), 25-32. https://doi.org/10.11648/j.ijfbr.20220801.14

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ACS Style

Anwar Adem Shikur; Omer Mohammed Ahmed; Mubarek Sadik Hussen. Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia. Int. J. Finance Bank. Res. 2022, 8(1), 25-32. doi: 10.11648/j.ijfbr.20220801.14

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AMA Style

Anwar Adem Shikur, Omer Mohammed Ahmed, Mubarek Sadik Hussen. Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia. Int J Finance Bank Res. 2022;8(1):25-32. doi: 10.11648/j.ijfbr.20220801.14

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@article{10.11648/j.ijfbr.20220801.14,
  author = {Anwar Adem Shikur and Omer Mohammed Ahmed and Mubarek Sadik Hussen},
  title = {Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia},
  journal = {International Journal of Finance and Banking Research},
  volume = {8},
  number = {1},
  pages = {25-32},
  doi = {10.11648/j.ijfbr.20220801.14},
  url = {https://doi.org/10.11648/j.ijfbr.20220801.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20220801.14},
  abstract = {This study was primarily conducted to investigate influencing factors for insurance companies specifically for private insurance operating in Ethiopia. To attain the objective both industry-specific and macro-economic factors include the ratio of liquidity, leverage, the volume of capital, age of the insurance, underwriting risk, premium growth, market share, inflation, and economic growth. The study included ten insurance companies with operations from 2011 to 2020. Secondary data was collected from the Ethiopian central bank (National Bank of Ethiopia). An explanatory research design with a mixed approach was used for this study. Furthermore, this study employed OLS to estimate a multiple regression model constructed through E-views 10 software after all the necessary diagnostic tests were undertaken. The finding indicates liquidity, firm premium growth, the age of the company, and market share have significant positive effects on insurance profitability. Whereas, underwriting risk, leverage, the volume of capital, and inflation reveal significant but adverse effects on insurance profitability. The study suggests insurances companies adopt different techniques such as improving loss handling mechanisms, assessing and gathering adequate information about the insured before selection, and marketing managers should pay a great deal of attention to maximizing market share through the use of user-friendly information technology for both the insurance and it is customers.},
 year = {2022}
}

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TY  - JOUR
T1  - Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia
AU  - Anwar Adem Shikur
AU  - Omer Mohammed Ahmed
AU  - Mubarek Sadik Hussen
Y1  - 2022/01/26
PY  - 2022
N1  - https://doi.org/10.11648/j.ijfbr.20220801.14
DO  - 10.11648/j.ijfbr.20220801.14
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 25
EP  - 32
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20220801.14
AB  - This study was primarily conducted to investigate influencing factors for insurance companies specifically for private insurance operating in Ethiopia. To attain the objective both industry-specific and macro-economic factors include the ratio of liquidity, leverage, the volume of capital, age of the insurance, underwriting risk, premium growth, market share, inflation, and economic growth. The study included ten insurance companies with operations from 2011 to 2020. Secondary data was collected from the Ethiopian central bank (National Bank of Ethiopia). An explanatory research design with a mixed approach was used for this study. Furthermore, this study employed OLS to estimate a multiple regression model constructed through E-views 10 software after all the necessary diagnostic tests were undertaken. The finding indicates liquidity, firm premium growth, the age of the company, and market share have significant positive effects on insurance profitability. Whereas, underwriting risk, leverage, the volume of capital, and inflation reveal significant but adverse effects on insurance profitability. The study suggests insurances companies adopt different techniques such as improving loss handling mechanisms, assessing and gathering adequate information about the insured before selection, and marketing managers should pay a great deal of attention to maximizing market share through the use of user-friendly information technology for both the insurance and it is customers.
VL  - 8
IS  - 1
ER  -

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Author Information

Anwar Adem Shikur

Department of Accounting and Finance, College of Business and Economics, Dire Dawa University, Dire Dawa, Ethiopia
Omer Mohammed Ahmed

Department of Accounting and Finance, College of Business and Economics, Dire Dawa University, Dire Dawa, Ethiopia
Mubarek Sadik Hussen

Department of Accounting and Finance, College of Business and Economics, Dire Dawa University, Dire Dawa, Ethiopia

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Plain Text BibTeX RIS

APA Style

Anwar Adem Shikur, Omer Mohammed Ahmed, Mubarek Sadik Hussen. (2022). Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia. International Journal of Finance and Banking Research, 8(1), 25-32. https://doi.org/10.11648/j.ijfbr.20220801.14

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ACS Style

Anwar Adem Shikur; Omer Mohammed Ahmed; Mubarek Sadik Hussen. Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia. Int. J. Finance Bank. Res. 2022, 8(1), 25-32. doi: 10.11648/j.ijfbr.20220801.14

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AMA Style

Anwar Adem Shikur, Omer Mohammed Ahmed, Mubarek Sadik Hussen. Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia. Int J Finance Bank Res. 2022;8(1):25-32. doi: 10.11648/j.ijfbr.20220801.14

Copy | Download

@article{10.11648/j.ijfbr.20220801.14,
  author = {Anwar Adem Shikur and Omer Mohammed Ahmed and Mubarek Sadik Hussen},
  title = {Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia},
  journal = {International Journal of Finance and Banking Research},
  volume = {8},
  number = {1},
  pages = {25-32},
  doi = {10.11648/j.ijfbr.20220801.14},
  url = {https://doi.org/10.11648/j.ijfbr.20220801.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20220801.14},
  abstract = {This study was primarily conducted to investigate influencing factors for insurance companies specifically for private insurance operating in Ethiopia. To attain the objective both industry-specific and macro-economic factors include the ratio of liquidity, leverage, the volume of capital, age of the insurance, underwriting risk, premium growth, market share, inflation, and economic growth. The study included ten insurance companies with operations from 2011 to 2020. Secondary data was collected from the Ethiopian central bank (National Bank of Ethiopia). An explanatory research design with a mixed approach was used for this study. Furthermore, this study employed OLS to estimate a multiple regression model constructed through E-views 10 software after all the necessary diagnostic tests were undertaken. The finding indicates liquidity, firm premium growth, the age of the company, and market share have significant positive effects on insurance profitability. Whereas, underwriting risk, leverage, the volume of capital, and inflation reveal significant but adverse effects on insurance profitability. The study suggests insurances companies adopt different techniques such as improving loss handling mechanisms, assessing and gathering adequate information about the insured before selection, and marketing managers should pay a great deal of attention to maximizing market share through the use of user-friendly information technology for both the insurance and it is customers.},
 year = {2022}
}

Copy | Download

TY  - JOUR
T1  - Empirical Evidence on Influencing Factors of Profitability of Private Insurances in Ethiopia
AU  - Anwar Adem Shikur
AU  - Omer Mohammed Ahmed
AU  - Mubarek Sadik Hussen
Y1  - 2022/01/26
PY  - 2022
N1  - https://doi.org/10.11648/j.ijfbr.20220801.14
DO  - 10.11648/j.ijfbr.20220801.14
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 25
EP  - 32
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20220801.14
AB  - This study was primarily conducted to investigate influencing factors for insurance companies specifically for private insurance operating in Ethiopia. To attain the objective both industry-specific and macro-economic factors include the ratio of liquidity, leverage, the volume of capital, age of the insurance, underwriting risk, premium growth, market share, inflation, and economic growth. The study included ten insurance companies with operations from 2011 to 2020. Secondary data was collected from the Ethiopian central bank (National Bank of Ethiopia). An explanatory research design with a mixed approach was used for this study. Furthermore, this study employed OLS to estimate a multiple regression model constructed through E-views 10 software after all the necessary diagnostic tests were undertaken. The finding indicates liquidity, firm premium growth, the age of the company, and market share have significant positive effects on insurance profitability. Whereas, underwriting risk, leverage, the volume of capital, and inflation reveal significant but adverse effects on insurance profitability. The study suggests insurances companies adopt different techniques such as improving loss handling mechanisms, assessing and gathering adequate information about the insured before selection, and marketing managers should pay a great deal of attention to maximizing market share through the use of user-friendly information technology for both the insurance and it is customers.
VL  - 8
IS  - 1
ER  -

Copy | Download