Research Paper
Year: 2020 | Month: March | Volume: 7 | Issue: 3 | Pages: 223-231
The Effect of Claim Ratio, Operational Ratio and Retention Ratio on Profitability Performance of Insurance Companies in Indonesia Stock Exchange
Angga Firmansyah Putra Hasibuan, Isfenti Sadalia, Iskandar Muda
Master of Management Universitas Sumatera Utara, Indonesia
Corresponding Author: Angga Firmansyah Putra Hasibuan
ABSTRACT
One of the non-bank financial institutions is an insurance company, which is a company engaged in financial services where insurance companies provide benefits to consumers in dealing with risks that will occur in the future. The good performance of insurance companies is generally reflected through the profitability generated from the company's financial statements. Based on previous research there are several factors that affect profitability. Claim ratio is considered as the ratio that most influences the level of profitability, the other ratio is reflected from the ratio of the company's expences (operating expenses) where it is known how to manage costs at the company against the net premium income received by insurance companies, the next ratio is the retention ratio. The study was conducted on insurance companies listed on the Indonesia Stock Exchange in the period 2011 - 2018. Samples of 9 companies with secondary data were obtained from the Indonesia Stock Exchange or the company's website. The study uses Panel Data Regression Method analysis techniques that are used to test hypotheses in research with the help of SPSS applications. Claim ratio and operating expense ratio have negative and significant effect on profitability while retention ratio has positive and not significant effect on profitability. Claim ratio, operational expense ratio and retention ratio together have a significant effect on company profitability.
Keywords: Insurance, Claim Ratio, Operating Ratio, Retention Ratio, ROA, SPSS, Panel Data Regression
[PDF Full Text]