Micro- and Macro-Level Factors Determining Financial Performance of UAE Insurance Companies
Journal of Asian Finance, Economics and Business
The research aims to analyze the firm-specific and macroeconomic factors that affect insurance company's financial performance. Theresearch explores the variables that influence the financial performance of the United Arab Emirates (UAE)’ insurance companies. Theanalysis for determining financial performance considers the following variables: the firm's age, retention ratio, capital adequacy, underwritingrisk/loss ratio, financial-leverage, reinsurance dependency, and macro-economic factors such as GDP per capita, inflation rate consideredas independent factors. The return-on-asset (ROA) is the key measuring indicator; it is regarded as the dependent variable for financialperformance measures. The research focuses on secondary information obtained from insurance companies’ financial statements. Theresearcher targeted 18 insurance companies listed on the UAE stock exchanges for study purposes. The research examines the overall factorsthat influence the financial performance of an insurance company. For analysis of data, software package of social sciences (SPSS version 20)is used. The studies used correlation and multiple linear regression analysis to determine financial performance and their effects. The analysissuggests that there are important and constructive relationships between the size, capital adequacy, and reinsurance dependency, while lossratio, retention ratio, and financial leverage indicate a major negative relationship. And there's no link between GDP per capita and inflation.
SASIDHARAN, Soumya; RANJITH, V. K.; and PRABHURAM, Sunitha, "Micro- and Macro-Level Factors Determining Financial Performance of UAE Insurance Companies" (2020). Open Access Archive. 44.