dc.description.abstract |
Insurance is a way of transferring risk from insured to the insurer by considering premium
payments. Insurance plays a great role in a country's economic growth and offers financial
protection to an individual or firm against monetary and non-monetary losses suffered from
unforeseen circumstances. Ethiopian insurance companies are remained undeveloped and As a
result, the insurance industry in Ethiopia's economy is not growing as predicted, it is less
profitable, and it is unable to compete on a global scale As a result, this study investigated the
determinants of insurance companies' profitability in Ethiopia, such as size, liquidity, leverage,
inflation, market share, age, capital adequacy, and premium growth, and assessed their effects on
Ethiopian insurance profitability using descriptive statistics, correlation analysis, and the linear
regression method on the given panel data. The researchers conducted the analysis using secondary
data obtained from audited annual reports (balance sheets, income statements) of Ethiopian
insurance companies. The study included 9 insurance companies in Ethiopia from 2011 to 2020. To
indicate an insurance company’s financial performance and profitability, ROA is used as a
dependent variable & liquidity, premium growth, age, inflation, size, adequacy of capital, market
share & leverage as independent variables. Liquidity, premium growth, age, inflation, size and
capital adequacy all have a significant impact on Ethiopian insurers' profitability during the study
period. Leverage and market share had an insignificant impact on Ethiopian insurers' profitability
during the study period. Therefore, the study recommends that Ethiopian insurance companies
should give due consideration to these factors to address profitability issues. |
en_US |