Determinant of Financial Performance for General Insurance Companies in Indonesia

Fanny Septina


The study aims to explore the influence of the insurance company’s specific variables and macroeconomic factors on financial performance of general insurance companies in Indonesia. The insurance company’s spesific variables are proxied by the claims ratio, premium growth ratio and risk-based-capital ratio as well as macroeconomic variables by Gross Domestic Products (GDP) and inflation, financial performance are proxied by return on assets and return on equity. The research samples are 35 registered general insurance companies at Financial Services Authority (OJK) for the 2016-2019 periods. The research method is panel data regression analysis with three stages model estimation approach ; Chow-test, Hausman-test and Langrange Multiplier-test to estimate the proper regression model of the Common Effect Model, Fixed Effect Model or Random Effect Model. The most fit regression model analysis to be selected is Random Effect Model. The results shows that the claims ratio affects return on assets and return on equity significantly, the risk-based-capital ratio affects return on assets significantly, but not affects return on equity significantly. While the premium growth ratio, GDP and inflation not affects return on assets and return on equity signficantly.


financial stability, financial performance, general insurance, panel data regression.

Full Text:



Barua, B., Barua, S., & Rana, R. H. (2018). Determining the Financial Performance of Non-Life Insurers: Static and Dynamic Panel Evidence from an Emerging Economy. The Journal of Developing Areas.

Batool, A., & Sahi, A. (2019). Determinants of Financial Performance of Insurance Companies of USA and UK during Global Financial Crisis (2007-2016). International Journal of Accounting Research.

Brigham, E. F., & Houston, J. F. (2020). Dasar-Dasar Manajemen Keuangan (14th ed.). Salemba Empat.

Caporale, G. M., Cerrato, M., & Zhang, X. (2017). Analysing the determinants of insolvency risk for general insurance firms in the UK. Journal of Banking and Finance.

Çekrezi, A. (2015). Determinants of Financial Performance of the Insurance Companies : a Case of Albania. International Journal of Economics, Commerce and Management.

Cummins, J. D., & Phillips, R. (2009). Capital Adequacy and Insurance Risk-Based Capital Systems. Journal of Insurance Regulation.

European Central Bank. (2009). E U RO P E A N C E N T R A L B A N K FINANCIAL STABILITY REVIEW december 2009.

Foong, S. Y., & Idris, R. (2012). Leverage, product diversity and performance of general insurers in Malaysia. Journal of Risk Finance.

Frameswari, D. R., Ikasari, N., & Umanto. (2017). Financial dependency and macroeconomic analysis of banking and insurance companies in ASEAN-5 countries. Development and Society.

Harjadi, & Sihombing, P. (2020). Financial Distress Analysis of Registered Insurance Companies in Indonesia Stock Exchange 2015-2019. European Journal of Business and Management Research.

Jung, H. (2020). Development finance, blended finance and insurance. International Trade, Politics and Development.

Meher, K. C., & Zewudu, T. (2020). Determinants of firm’s internals & macroeconomic factors on financial performance of Ethiopian insurers. DLSU Business and Economics Review.

Mukherjee, T., Gorai, P., & Sen, S. S. (2020). Financial performance analysis of GIC Re. Vilakshan - XIMB Journal of Management.

Mwangi, M., & Iraya, C. (2014). Determinants of Financial Performance of General Insurance Underwriters in Kenya. International Journal of Business and Social Science.

Nurfadila, S., Hidayat, R. R., & Sulasmiyati, S. (2015). Analisis Rasio Keuangan dan Risk Based Capital untuk Menilai Kinerja Keuangan Perusahaan Asuransi. Jurnal Administrasi Bisnis S1 Universitas Brawijaya.

OJK, O. J. K. R. I. (2016). Peraturan Otoritas Jasa Keuangan Nomor 71 /POJK.05/2016 Tentang Kesehatan Keuangan Perusahaan Asuransi Dan Perusahaan Reasuransi.

Putra, I. N. D. D. (2017). The Influence Growth Of Income , Assets , Ratio of Claim and Risk Based Capital on the Profitability of Life Insurance Companies in Indonesia. The Influence Growth Of Income, Assets, Ratio of Claim and Risk Based Capital on the Profitability of Life Insurance Companies in Indonesia I, 6(09), 24–42.

Saunders, A., & Cornett, M. M. (2006). Financial Institutions Management: A Risk Management Approach (5th ed.). McGraw Hill.

Soekarno, S., & Azhari, D. A. (2009). Analysis of Financial Ratio to Distinguish Indonesia Joint Venture General Insurance Company Performance using Discriminant Analysis Theoritical Foundation Insurance. The Asian Journal of Technology Management, 2(2), 100–111.

Sumartono, S., & Harianto, K. A. (2018). Kinerja Keuangan Perusahaan Asuransi Di Indonesia dan Faktor-faktor yang Mempengaruhinya. Future Jurnal Manajemen Dan Akuntansi, 6(1).

Tarsono, O., Ardheta, P. A., & Amriyani, R. (2020). The Influence of Net Premium Growth, Claim Ratio and Risk-Based Capital on the Financial Performance of Life Insurance Companies. Annual International Conference on Accounting Research (AICAR 2019), 65–68.

Xu, H., Hwan Lee, S., & Ho Eom, T. (2007). Introduction to Panel Data Analysis. April 2020.

Zelie, E. M. (2019). Determinants of Financial Distress in Case of Insurance Companies in Ethiopia. Research Journal of Finance and Accounting, 10(15).

Zulfikar, R. (2018). Estimation Model And Selection Method Of Panel Data Regression : An Overview Of Common Effect, Fixed Effect, And Random Effect Model. October.


Copyright (c) 2022 Fanny Septina

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

ISSN: 2355-0295 || EISSN: 2549-8932


Indexed by:

dipublikasikan oleh LPPM Universitas Bina Sarana Informatika dengan dukungan Relawan Jurnal Indonesia

Jl. Kramat Raya No.98, Kwitang, Kec. Senen, Kota Jakarta Pusat, DKI Jakarta 10450
Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License