13th Students’ Research Symposium 2023/2024
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/29096
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Item The Firm Specific Internal Factors Affecting Financial Performance of Life Insurance(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Babilathenna, B. M. K. K.; Sudasinghe, S. L.Introduction: This study investigates the financial intricacies of Sri Lanka’s life insurance industry by examining how premium income, claim expenses, and investment returns impact net income. These internal factors are pivotal in shaping financial performance, making them essential for insurers striving to optimize profitability. By uncovering the interplay between these variables, this research aims to illuminate strategies for navigating the sector’s financial challenges. Methodology: The analysis focused on six life insurance companies listed with the Insurance Regulatory Commission of Sri Lanka (IRCSL) that provided complete financial disclosures from 2012 to 2022. These firms were selected using purposive sampling, ensuring relevance and data quality. A panel data regression model, processed with the STATA application, was utilized to evaluate the relationships between premium income, claim expenses, and investment returns. This rigorous approach provided nuanced insights into their influence on net income. Findings: The findings revealed a complex dynamic among the three variables. Investment returns emerged as the most significant driver, positively influencing net income and highlighting their vital role in financial stability. Surprisingly, premium income exhibited a significant negative impact, suggesting inefficiencies in managing these inflows, possibly due to higher associated costs or misaligned operational strategies. Claim expenses, while not statistically significant at the 5% level, displayed a negative impact at the 10% level, underscoring their potential to strain financial resources subtly. Conclusion: This study underscores the challenges facing Sri Lanka’s life insurers. While premium collection remains a priority, inefficiencies in its management can erode profitability. Simultaneously, claim expenses demand careful oversight to mitigate latent financial risks. The key to overcoming these hurdles lies in enhancing investment strategies and adopting robust risk management frameworks. These findings enrich the existing body of knowledge and provide actionable insights for stakeholders in the life insurance sector.Item The Firm’s Specific Factors Affecting the Financial Performance of General Insurance Companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Kavinya, W. A. D. E.; Sudasinghe, S. L.Introduction: The financial performance of general insurance companies is influenced by various firm-specific factors, including premium income, claim costs, underwriting results, and financial leverage. These factors are crucial in determining the profitability and overall financial health of insurance firms. This study aims to empirically test the impact of these firm-specific factors on the financial performance of general insurance companies in Sri Lanka. Methodology: This study on the impact of premium income, claim cost, underwriting results, and financial leverage on the financial performance of general insurance companies in Sri Lanka outlines the approach used to analyze these factors. The study uses a quantitative approach, relying on secondary data from the financial reports of 10 selected general insurance companies in Sri Lanka. Key variables, including premium income, claim costs, underwriting results, and financial leverage (debt-to-equity ratio), are measured and analyzed using statistical tools such as regression analysis to assess their effect on financial performance. Financial performance is measured using Return on Assets (ROA) as a dependent variable. Data analysis is performed using Random-effects panel regression models. The sample includes both publicly listed and private insurance companies, and the analysis focuses on data over a defined period. Findings: The results of the study revealed that premium income and underwriting results have a significant positive impact on ROA, suggesting that higher premium income and better underwriting practices enhance financial performance. Conversely, higher claim costs and increased financial leverage are found to have a negative effect on profitability, reducing ROA. These findings emphasize the importance of managing underwriting practices and claim costs, while also controlling financial leverage to improve overall financial performance. Conclusion: The study underscores the significant role that premium income, claim costs, underwriting results, and financial leverage play in shaping the financial performance of general insurance companies in Sri Lanka. To enhance profitability and solvency, insurance firms should focus on increasing premium income, optimizing underwriting results, and managing claim costs and financial leverage effectively. These insights provide valuable guidance for investors, management, and policymakers aiming to improve the financial health of the Sri Lankan insurance industry.