Ethiopian insurance sector does not grow as expected and cannot take a major part for the economic development and it contributes less than 1% to country’s total GDP; therefore, the purpose of this study focuses on identifying the success and failure factors of Ethiopia Insurance Corporations profitability. Time-series data of Ethiopian Insurance Corporation from 1987 to 2016 was analyzed using multiple linear regression method. In this study, secondary data was analyzed to investigate the major factors of insurance profitability. To answer the above proposed main objective, descriptive statistics, diagnostic tests and OLS regression method have been run using E-Views 9 to test hypothesis of tangibility of asset, leverage ratio, liquidity ratio, insurance size, loss ratio, GDP gross rate and inflation rate on profitability measure i.e (ROA) and quantitative research approach were used. The regression results shows that tangibility of asset, liquidity ratio, leverage ratio, GDP gross rate and inflation rate were significant at 99 percent level of significance but; insurance size and loss ratio have insignificant. The regression shows that all explanatory variables have negative effect on the profitability except leverage ratio and liquidity ratio. So, insurance should pay due attention in using more debt because interest rate are tax free. Ethiopian Insurance Corporations in order to maximize profitability should not require large volume of fixed assets or do not require beyond optimum level of fixed assets. Ethiopian Insurance Corporation should be increase awareness level of insurance among majority of the citizens including rural area and investing in risky investments which may in turn increase profitability. Finally Government should pay due attention in reducing inflation rate by participating in price setting in market and decrease exchange rate because most of the goods are importable otherwise profitability is reduced by increasing the price.