FACTORS AFFECTING PROFITABILITY OF NEPALESE INSURANCE COMPANIES

Abstract

This study aimed to examine the factors affecting profitability in the context of Nepalese insurance companies. Out of micro variables, selected variables Leverage (LEV), premium growth (PG), Firm age (FA), Tangibility assets (TA), Liquidity (LIQ), Firm Size (FS), Return on assets (ROA) and Return on equity (ROE) are analyzed. To carry out the study, descriptive and casual comparative research design was employed based on secondary data, of study period of 2070/71 to 2079/80. The regression analysis and correlation analysis and hypothesis test were applied for data analysis. It was found that PG, LEV, FS and TA and ROA and ROE have significant positive association on profitability of Nepalese insurance companies. Accepting the null hypothesis, found that there is no significant impact of LIQ and FA on profitability of insurance companies in Nepal. Thus, it is concluded that premium growth, leverage, firm size and tangibility assets are the key determinants of profitability of insurance companies in Nepal Keywords: Return on assets, return on equity, leverage, liquidity, tangibility, premium growth, firm size and firm age