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An Analysis of Factors Affecting the Performance of Insurance Companies in Zimbabwe

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  • Batsirai Winmore Mazviona
  • Mbakisi Dube
  • Tendai Sakahuhwa

Abstract

The study sought to examine factors affecting the performance of insurance companies in Zimbabwe. We utilized secondary data from twenty short-term insurance companies. The data was for the period from 2010 to 2014. We used factor analysis and multiple linear regression models to determine the factors affecting performance and identifying their impact. Our findings revealed that expense ratio, claims ratio and the size of a company significantly affect insurance companies’ performance negatively. Whilst leverage and liquidity affect performance positively. We recommend that insurance companies should introduce mechanisms that reduces operational costs such as automated systems.JEL classification numbers: C3, G1, G22Keywords: Performance, Insurance, Regression Analysis, Factor Analysis

Suggested Citation

  • Batsirai Winmore Mazviona & Mbakisi Dube & Tendai Sakahuhwa, 2017. "An Analysis of Factors Affecting the Performance of Insurance Companies in Zimbabwe," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 6(1), pages 1-2.
    • Handle: RePEc:spt:fininv:v:6:y:2017:i:1:f:6_1_2
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    References listed on IDEAS

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    1. Ana-Maria Burca & Ghiorghe Batrinca, 2014. "The Determinants of Financial Performance in the Romanian Insurance Market," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(1), pages 299-308, January.
    2. Renbao Chen & Kie Ann Wong, 2004. "The Determinants of Financial Health of Asian Insurance Companies," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 71(3), pages 469-499, September.
    3. Bourke, Philip, 1989. "Concentration and other determinants of bank profitability in Europe, North America and Australia," Journal of Banking & Finance, Elsevier, vol. 13(1), pages 65-79, March.
    4. M. Adams & M. Buckle, 2003. "The determinants of corporate financial performance in the Bermuda insurance market," Applied Financial Economics, Taylor & Francis Journals, vol. 13(2), pages 133-143.
    5. Mark Browne & James Carson & Robert Hoyt, 2001. "Dynamic Financial Models of Life Insurers," North American Actuarial Journal, Taylor & Francis Journals, vol. 5(2), pages 11-26.
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    Cited by:

    1. Nazish Ishtiaq & Danish Ahmed Siddiqui, 2019. "Factors Affecting Financial Performance of Life Insurance Sector in Pakistan," International Journal of Social and Administrative Sciences, Asian Economic and Social Society, vol. 4(2), pages 178-199, June.
    2. Abhijit Sharma & Diara Md. Jadi & Damian Ward, 2021. "Analysing the determinants of financial performance for UK insurance companies using financial strength ratings information," Economic Change and Restructuring, Springer, vol. 54(3), pages 683-697, August.
    3. Muhammad Aleem Arshad & Muhammad Haneef Akhtar & Muhammad Ramzan Sheikh & Wajeeha Sheereen, 2023. "Determinants of Investment Yield of Insurance Firms in Pakistan," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 9(2), pages 214-286.

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    More about this item

    Keywords

    performance; insurance; regression analysis; factor analysis;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • G1 - Financial Economics - - General Financial Markets

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