Key capital-related factors impacting the financial performance of listed non-life insurance companies

Abstract

This thesis explores the key factors influencing the financial performance of companies. The objective of this research is to examine the relationships between various factors and financial performance indicators, namely Return on Assets (ROA) and Return on Equity (ROE). By investigating these factors, businesses can gain valuable insights to enhance their financial performance and drive sustainable growth. To conduct this study, a sample of companies from the non-life insurance industry was analyzed using regression analysis. The dataset encompassed various financial variables, including dividend payout policy, cash holdings, leverage ratio, and long-term investments. These variables were chosen based on a literature review that highlighted their relevance to financial performance and their potential impact on the profitability and efficiency of companies in the non-life insurance sector. The regression analysis allowed for the examination of the relationships between these factors and the financial performance indicators, providing valuable insights into their significance and impact. The findings of this research shed light on the relationships between the key factors and financial performance indicators. Results revealed that a dividend policy is positively correlated with financial performance . Companies that consistently pay dividends to their equity shareholders tend to exhibit higher profitability, signaling financial stability and attracting investor confidence. The analysis revealed that cash holdings, leverage ratio, and long-term investments have varying impacts on financial performance depending on the indicator and set of companies used . Higher cash holdings were associated with improved profitability when measured by ROA, while leverage ratio showed a negative correlation with ROE. Long-term investments were found to positively impact financial performance when measured by ROA, but the relationship turned negative when measured by ROE.