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Financial data reporting analysis of the factors influencing on profitability for insurance companies

Author

Listed:
  • Alina Kulustayeva

    (Narxoz University, Kazakhstan)

  • Aigul Jondelbayeva

    (Narxoz University, Kazakhstan)

  • Azhar Nurmagambetova

    (Al-Farabi Kazakh National University, Kazakhstan)

  • Aliya Dossayeva

    (Turan University, Kazakhstan)

  • Aliya Bikteubayeva

    (Turan University, Kazakhstan)

Abstract

In this article the econometric analysis of panel data for insurance companies of the Republic of Kazakhstan from with a research objective of financial figure for profitability and influencing of factors defining profitability was performed. The article reveals the indicators that affect the profitability of insurance companies in order to further forecast. Independent variables were calculated using information on insurance companies of the Republic of Kazakhstan available in the public domains, mainly data from financial statements. The author reaches to prove that the data on insurance companies’ obligations exert special influence on the evaluation of the profitability of the insurance company. The article suggests a methodical approach to measuring financial indicators of insurance companies based on panel data models, taking into account industry and individual differences. The research is carried out using the Gretl software package. Panel data models with fixed effects, panel data models with random effects were applied, and the most effective model was selected by the Hausman Test. As a result, it is proved that the profitability of the insurance company is affected by three indicators, two of which are calculated on the financial statements, including the financial leverage. This allows us to use these indicators in further forecasting the profitability and financial stability of insurance companies. Correctness of the assessment of profitability and forecasts are influenced by the correctness of data in the financial statements. The quality of models is limited by the quality of the financial statements of companies analyzed in this article.

Suggested Citation

  • Alina Kulustayeva & Aigul Jondelbayeva & Azhar Nurmagambetova & Aliya Dossayeva & Aliya Bikteubayeva, 2020. "Financial data reporting analysis of the factors influencing on profitability for insurance companies," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 7(3), pages 2394-2406, March.
    • Handle: RePEc:ssi:jouesi:v:7:y:2020:i:3:p:2394-2406
    DOI: 10.9770/jesi.2020.7.3(62)
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    References listed on IDEAS

    as
    1. Willem Mertens & Amedeo Pugliese & Jan Recker, 2017. "Quantitative Data Analysis," Springer Books, Springer, number 978-3-319-42700-3, September.
    2. repec:eme:jrfpps:v:14:y:2013:i:2:p:286-302 is not listed on IDEAS
    3. Joseph Oscar Akotey & Frank G. Sackey & Lordina Amoah & Richard Frimpong Manso, 2013. "The financial performance of life insurance companies in Ghana," Journal of Risk Finance, Emerald Group Publishing, vol. 14(3), pages 286-302, May.
    4. Bipasha Barua & Suborna Barua & Rezwanul Hasan Rana, 2018. "Determining the Financial Performance of Non-Life Insurers Static and Dynamic Panel Evidence from an Emerging Economy," Journal of Developing Areas, Tennessee State University, College of Business, vol. 52(3), pages 153-167, July-Sept.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Sunday Oseiweh Ogbeide & Henry Usunobun Ogiugo & Isaac Olufemi Adesuyi, 2021. "Corporate governance mechanisms and financial reporting quality of commercial banks in Nigeria," Insights into Regional Development, VsI Entrepreneurship and Sustainability Center, vol. 3(1), pages 136-146, March.
    2. Lu Xiong & Vajira Manathunga & Jiyao Luo & Nicholas Dennison & Ruicheng Zhang & Zhenhai Xiang, 2023. "AutoReserve: A Web-Based Tool for Personal Auto Insurance Loss Reserving with Classical and Machine Learning Methods," Risks, MDPI, vol. 11(7), pages 1-17, July.
    3. Sunday Oseiweh Ogbeide & Henry Usunobun Ogiugo & Isaac Olufemi Adesuyi, 2021. "Corporate governance mechanisms and financial reporting quality of commercial banks in Nigeria," Post-Print hal-03583879, HAL.
    4. Omer Bagais & Khaled Aljaaidi & Abdulaziz Alothman, 2021. "An Empirical Investigation of the Associations of Short and Long Debt Policies with Economic Values of Energy Sector," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 249-254.

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    More about this item

    Keywords

    insurance companies; profitability; profitability of insurance companies; analysis of insurance companies; panel data models with the fixed effects; panel data models with random effects; leverage; profitability forecast;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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