Abstract:
With the drastic changes occurring in the corporate sector, the relevance of insurance companies is progressively increasing. Insurance companies are essential and contribute significantly to the country's development. Therefore, this study aims to pinpoint the micro-level factors that influence the financial success of Sri Lankan insurance companies. Return on Assets and five independent factors, including reinsurance dependence, commission ratio, reinsurance premium ratio, leverage ratio, and firm size, were used to assess financial performance. Out of the twenty-eight insurance companies accessible for this study from 2013 to 2021, eight long-term licensed insurance companies were chosen randomly as the sample. Necessary secondary information was acquired from the annual reports of each company and the Insurance Board of Sri Lanka (IBSL). Multiple regression analysis and descriptive statistics are the statistical methods used in this investigation. According to the study, only reinsurance dependence exhibits a statistically significant positive influence on Return on Assets. In contrast, statistically, it is adversely affected by commission ratio, reinsurance premium ratio, debt, and company size.
