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Analysing the determinants of financial performance for UK insurance companies using financial strength ratings information

Author

Listed:
  • Abhijit Sharma

    (University of Bradford School of Management)

  • Diara Md. Jadi

    (University of Bradford School of Management)

  • Damian Ward

    (University of Bradford School of Management)

Abstract

We investigate the determinants of financial performance of UK insurance companies based on their financial strength ratings. We use data from the A.M. Best Insurance for 49 UK insurers for 2006–2009. Our findings show that profitability, liquidity, size and organisational form are the significant determinants that affect financial performance of insurance companies in the UK. We recommend an effective, alternative variable to more effectively measure the size of an insurance company, which is based on the gross premium written. We find that gross premium written is more appropriate for measuring company size in the insurance industry.

Suggested Citation

  • 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.
    • Handle: RePEc:kap:ecopln:v:54:y:2021:i:3:d:10.1007_s10644-019-09260-w
    DOI: 10.1007/s10644-019-09260-w
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    More about this item

    Keywords

    Insurance; Financial performance; Financial strength analysis;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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