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Capital Structure of Non-life Insurance Firms in Japan

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Listed:
  • Mahito Okura
  • Satoru Yamaguchi

Abstract

This research investigates the debt to equity ratio (D/E ratio) in non-life insurance firms in Japan through empirical analysis and offers several main findings. First, the solvency margin ratio has a negative effect on the D/E ratio. Second, neither the Return on Equity (ROE) nor the combined ratio has an impact on the D/E ratio. Third, the expense ratio has a positive effect on the D/E ratio, while the loss ratio does not. The second and third results imply that the expense ratio is the most suitable index for measuring profitability in Japan¡¯s non-life insurance firms when the D/E ratio is being considered.

Suggested Citation

  • Mahito Okura & Satoru Yamaguchi, 2016. "Capital Structure of Non-life Insurance Firms in Japan," Applied Economics and Finance, Redfame publishing, vol. 3(3), pages 45-49, August.
    • Handle: RePEc:rfa:aefjnl:v:3:y:2016:i:3:p:45-49
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    capital structure; debt to equity ratio; non-life insurance; Japan;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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