Cbi solvency ii matters 7 may consultation open until 19 june. Solvency determinants of conventional life insurers and. Analysis of determinants of profitability of commercial. In order to collect primary data, structured questionnaire were. In california, vallejo, stockton, and san bernardino have filed for bankruptcy. Mcdonald 1992 summarized the factors affecting insurer insolvency, which provide useful guidelines on an insurers financial health, but without classifying them into different types of insurers. Determinants of financial performance of selected listed. Moreover, the solvency ratio quantifies the size of a companys after tax income, not counting noncash depreciation expenses, as contrasted to the total debt obligations of the firm. Bank liquidity and its determinants in romania sciencedirect. Determinants of working capital requirement in listed. Asiapacific journal of risk and insurance the official journal of the asiapacific risk and insurance association. Descriptive statistics, correlation matrix, chow test, hausman test for fixed effect model and random effect model and breuschpagan lagrange.
This study investigated determinants of financial performance of listed financial sectors in karachi stock exchange from 2008 to 2012. Request pdf solvency determinants of conventional life insurers and takaful operators the business of insurance is based on the trust of its policyholders, who expect that their losses will be. Morningstar solvency score the morningstar solvency score is an accountingratio based metric. Are the determinants of banks and insurers capital. Kie ann wong is professor in the department of finance and accounting, nus, e. Financial performance determinants of organi zations. The main objective of this study was to establish the determinants of profitability in the insurance sector in kenya. Using the url or doi link below will ensure access to this page indefinitely. The research design was a census survey of all insurance companies in kenya.
The purpose of the guidelines is to adopt a consistent and convergent approach to solvency ii preparation across europe and to mitigate the risk that supervisors will adopt their own approaches at a national level. While the effective management of working capital leads to value. Loans involve a high degree of risk and have profound impact on the banks. Determinants of united kingdom general insurance company performance volume 10 issue 5 y. Determinants of solvency in selected cee banking sectors. These four characteristics are capital structure leverage, interest coverage, short term liquidity, and profitability.
Thus, sound financial conditions constitute the most important criterion for insurance firms, as well as for takaful operators. Using bankscope data, this thesis seeks to analyze the determinants of. In spite of the sector recording significant growth in gross written premium during the period 2010 to 2014, the state of profitability remained a matter of concern. Four ratios comprise the score, each of which describes a different creditrelevant characteristic of a company. Solvency ratios measure the financial soundness of a business and how well the company can satisfy its short and longterm obligations. Introduction in the current debate on macroprudential policy, the excessive procyclicality of leverage and liquidity risk in the banking sector have gained a lot of attention. To the best of our knowledge, this is the rst database of this kind to be exploited for empirical research on life insurers pro t sharing policies. Renbao chen is associate professor in the department of finance and accounting, national university of singapore nus. An empirical study of south african banks i declare that the above dissertation is my own work and that all the sources that i have used or quoted have been indicated and acknowledged by means of complete references. Although the policyholder may be the most important source of insurer finance. The financial needs of a business may vary due to size of the firm, sector in which it is operating, types of products and.
From the results obtained, the policyholdersconsumers can assess the insurers financial strength through the solvency determinants of the insurerstakaful operators, even though the actual. The few studies have mainly been confined to investigating the determinants of solvency rather than capital structure. Request pdf economic crisis and determinants of solvency in the insurance sector. Credit usually represents the bulk of the institutions assets, while interest on the credit represents the major source of income. Introducing the morningstar solvency score, a bankruptcy.
Pdf determinants of profitability in the insurance. In this respect, both practitioners and academics are looking for solutions that. Measuring and modeling determinants of fiscal stress in us. Thus, the current study fills the gap in the literature and provided an evidence, using recent and long data, of determinants of capital. Mcdonald 1992 summarized the factors affecting insurer insolvency, which provide useful guidelines on an insurers financial health, but without.
The objective of the paper is to investigate how banks adjust the structure of their balance sheet as a response to a funding shock and to propose a methodology for projecting banks liquidity ratios in a topdown stress test scenario. Distribution of solvency ratios life and composite have higher mean than general insurers distribution more skewed to the right for life and composite insurers in our analysis we used firms with 100% solvency of insurance companies operating in spain. Determinants of united kingdom general insurance company. Based on panel data for the three subperiods, 19861990, 19901994, and 19941999, it was further found that solvency determinants changed from one epoch to another.
This paper estimates a reducedform model to assess the insolvency risk of general insurance gi firms in the uk. It contributes in particular to the debate on the use of liquidity bu. Quick ratio this ratio, also called acid test or liquid ratio, considers. The authors wish to thank nus for providing financial support rp3992060 and various institutions, including the monetary authority of singapore and singapore. Determinants of banks liquidity and their impact on. Thus, the current study fills the gap in the literature and provided an evidence, using recent and long data, of determinants of capital structure of banking sector in gcc region 1.
Determinants of financial performance of financial sectors. Economic crisis and determinants of solvency in the. Determinants of financial performance of selected listed manufacturing firms in india 79 one of the most important factors to be taken into consideration is the finance of the organization. Pdf measuring solvency and its determinants among small. Solvency ratio sr eligible own funds eofscr this presentation is not about what the solvency ratio should be. Distribution of solvency ratios life and composite have higher mean than general insurers distribution more skewed to the right for life and composite insurers in our analysis we used firms with 100% pdf solvency determinants of conventional life insurers and takaful operators the business of insurance is based on the trust of its policyholders, who expect that their losses will be. The results of panel data regression analysis showed that there is a positive link between bank liquidity and capital adequacy, share of nonperforming loans and interest rates on loans and on interbank. Liquidity of czech commercial banks and its determinants. In a recent paper haq and heaney2 find mixed evidence on the relation between bank specific factors and bank risk measures in 15 european countries. The business of insurance is based on the trust of its policyholders, who expect that their losses will be compensated should the need arise at any time. Pdf determinants of the solvency of insurance companies. The paper investigates the impact of solvency and liquidity regulation on banks balance sheet structure.
Shiu skip to main content accessibility help we use cookies to distinguish you from other users and to provide you with a better experience on our websites. Economic factors and solvency harri nyrhinen university of helsinki abstract we study solvency of insurers in a practical model where in addition to basic insurance claims and premiums, economic factors like in ation, real growth and returns on the investments a ect the capital developments of the companies. The determinants of bank profitability through the global. Determinants of working capital requirement in listed firms. The target population was defined as all insurance companies, which operated in the insurance industry from january 2001 to december 2010. Working capital management is a criticalelementinthesurvivalof every firm. This study measures solvency and its determinants among agribusiness enterprises in nigeria. Determinants of solvency ratios across europe cae fall meeting 8th november 2019 paris. Us and eu antitrust policy for the licensing of intellectual property. This paper analyses the factors that determine the solvency of insurance companies operating in spain. Determinants of banks liquidity and their impact on financial performance in nepalese commercial banks sushil subedi1and bivab neupane2 abstract this paper aims to study the relationship between liquidity of selected nepalese commercial banks and their impact on financial.
The determinants of efficiency and solvency in savings and. Determinants of insurers reputational risk abstract whenpurchasingcoverage,insuranceconsumersareunabletoobserveaninsurersultimate performance on. Key words financial performance, romanian insurance market, panel data, fixed effects model, random effects model. Main determinants of profit sharing policy in the french. The case of general takaful and insurance companies in malaysia muhaizam ismail preserving financial stability is integral in developing financial institutions that are robust, resilient and competitive. The financial needs of a business may vary due to size of the firm, sector in which it. Measuring and modeling determinants of fiscal stress in us municipalities evgenia gorina and craig maher introduction in the past decade, a wave of fiscal crises has hit cities and counties throughout the united states.
The objective of this study was to investigate the factors of financial performance of financial sectors in pakistan. In comparison to earlier studies, it uses a much larger sample including 30 years of data for 515 firms, and also considers a much wider set of possible determinants of insolvency risk. Determinants of insurers reputational risk abstract whenpurchasingcoverage,insuranceconsumersareunabletoobserveaninsurersultimate performance on the explicit. The study aimed to investigate the factors that affect the solvency of the insurance companies in palestine and to highlight the nature and strength of the relationship between liquidity. The link between smalland mediumscale enterprises sme, solvency, and economic growth and development is not in doubt. Designmethodologyapproach data are extracted from the annual reports of six family takaful. The determinants of commercial bank profitability in sub. Empirical evidence using a dynamic system gmm joseph dery nyeadi1, yakubu awudu sare2 and godfred aawaar3 abstract. Purpose the purpose of this study is to empirically study firmspecific and economic factors affecting solvency of family takaful companies in malaysia. The determinants of bank profitability through the global financial crisis. The fixed effect panel data model regression analysis. In line with a theoretical model assessing the effects of capital and liquidity constraints on banks behaviour, we estimate the joint system of banks. The aim of this paper is to describe the development of bank solvency in six selected central and eastern european countries bosnia and herzegovina, bulgaria, croatia, romania, serbia and slovenia and to find out if the share of equity in total assets is influenced by the affiliation of banks with financial conglomerate or if other determinants are more important. Solvency ratio is one of the various ratios used to measure the ability of a company to meet its long term debts.
Analysing the determinants of insolvency risk for general. Low solvency and liquidity ratios could mean that the financial health of the sector was in doubt. Determinants of solvency margins of insurance companies in. To achieve this onerous task, we identify and analyze opinions, comments, suggestions and conclusions of various researchers and scholars alike in this critical area of corporate financial management. Determinants, working capital management, current assets. Most empirical studies that examined the determinants of capital structure have been done for specific country and there is little evidence of gcc region.