A Study On Determinants Of Profitability Of Life Insurance Companies Performance In India

Kancharla Kavya

Abstract


Life insurance is an important form of social security. Insurance does play the role of risk bearer in case of uncertainty of life. It helps the people in hedging their risk for the lives. Insurance sector in India have grown tremendously in the last decade and is taking a giant shape after privatization of insurance industry. Dynamic financial analysis has become an important tool for modeling operations of insurance companies. This analysis is used, among others, in revealing the main factors determining the financial performance of insurers. This paper identifies the determinants of the performance of life insurance companies in India using a panel data regression consisting of the firm’s specific internal factors over the period of 10 years from 2006-07 to 2015-16. Five financial performance measures are used to capture different aspects of the insurance operations. Study found that there is a significant negative impact of Tangibility and Leverage. Size has positively related but Revenue Growth and Liquidity have insignificant negative impact on profitability of life insurance companies in India. 

 


Keywords


Profitability, Performance, Return on Assets, Tangibility, panel data regression.

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