Impact of Investment on Profitability of Life Insurance Companies in Nepal

Abstract

he purpose of this study was to know the impact of investment and profitability of life insurance companies in Nepal. This study aims to examine the association between short term and long-term investment and profitability of selected

life insurance companies. In the study, two variables were taken as independent variable: long term investment and short term investment whereas return on equity was taken as dependent variable. A descriptive and causal comparative research design are used for this study. Four companies established between the year 2000-2008 were selected as a sample. Also the study tried to assess the companies’ ten years’ data i.e. from 2009-2019. Various tools used for data analysis are mean, standard deviation, coefficient of variation, correlation, regression etc. The data are collected from the various years’ annual report of selected life insurance companies. The finding shows that the profitability of all selected insurance companies is in fluctuating position whereas short-term and long-term investment position is increasing in certain companies and fluctuating in others. The relationship between long term investment and return on equity is found to be positive and insignificant whereas positive and significant between short term investment and return on equity.

Key words: Long term investment, Short term investment and Return on equity.