Factors Affecting Financial Performance of Insurance Industry in Pakistan

This study investigated the indicators of financialperformance of insurance companies of Pakistan. Gross written premium (GWP), Claim (CLM), Reinsurance (Rei), Management expenditure (MGE), Interest rate (IR), Size (SIZ), Leverage (LEV), Real GDP (RGDP) were taken as factors (independent variables), whereas Sales Profitability (SAP), Investment Income (INP), and Underwriting profit (UWP) were taken as proxy of financial performance. Data of five 5 insurance companies are chosen covering the period of 2013-2017. Data was analyzed using panel regression. Findings showed that the gross written premium has the significant impact on all three measure of profitability. The further size of the company has a negative impact on sales and investment profit. In addition, the claims, reinsurance, GDP, interest rate and management expenses have an insignificant relationship with all three profitability measures.Hence, in order to improve operational and financial performance of the insurance industry in Pakistan, more focus should be given to factors that could increase premium