Journal article Open Access
FACTORS AFFECTING PROFITABILITY OF INSURANCE COMPANIES IN ETHIOPIA
Kuma Motuma Tolera
This study examined the effects of factors (age of company, GDP, inflation rate, interest rate, liquidity ratio, loss ratio, size of company and tangibility of assets) on the profitability of insurance companies in Ethiopia. Profitability is a dependent variable, while age of company, GDP, inflation rate, interest rate, liquidity ratio, loss ratio, size of company and tangibility of assets are independent variables. The sample in this study includes eight of the listed insurance companies (EIC, Awash, Nile, Africa, Nib, Nyala, UNIC and Oromia) for eleven years (2013 - 2023). Secondary data was obtained from the financial statements of insurance companies; the financial publications of NBE were analyzed. Panel data was analyzed using Fixed-effect (FE) Model. From the regression results; age of the company, GDP, liquidity ratio and size of the companies are identified as the most important determinants of profitability. In contrast, inflation rate and loss ratio were negatively but significantly related to profitability. Lastly, interest rate and tangibility of assets were not significantly related to profitability.
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- Publication date:
- May 14, 2025
- DOI:
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- License (for files):
- Creative Commons Attribution