The Influence of Loss Ratio on Profitability of Non-Life Insurance Companies in Thailand: The Moderating Roles of Company Type

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Sippavit Wongsuwatt Wipada Thaothampitak Nattanicha Kongjam Jutamat Ruttanapibool Ruttawit Apacuppakul Thawanhathai Koedkaeo

Abstract

          Research on the influence of loss ratio on the profitability of insurance companies has grown in importance. This study aims to investigate the influence of loss ratio on the profitability of non-life insurance companies and the moderating role of the type of companies. Fifty-two non-life insurance companies in Thailand were selected to collect the financial database for this study. Results from Ordinal Least Square (OLS) regression found significant negative relationships between loss ratio and the profitability of non-life insurance companies related to profitability, return on assets, return on equity, profit margin, and net profit margin. In addition, the type of company influenced its loss ratio and profitability. In terms of organizational implications, our findings would suggest that enhancing underwriting functions and risk management policies to reduce the chances of, and impacts from, future losses or claim payouts will improve a company’s profitability. In addition, balancing lines of insurance business will enhance and improve a company’s profitability as well.


Keywords: Loss Ratio, Profitability, Non-Life Insurance Company

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Section
Research Articles

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How to Cite
WONGSUWATT, Sippavit et al. The Influence of Loss Ratio on Profitability of Non-Life Insurance Companies in Thailand: The Moderating Roles of Company Type. Journal of Community Development Research (Humanities and Social Sciences), [S.l.], v. 14, n. 1, p. 46-60, dec. 2020. ISSN 2539-5521. Available at: <http://www.journal.nu.ac.th/JCDR/article/view/Vol-14-No-1-2021-46-60>. Date accessed: 08 mar. 2021. doi: https://doi.org/10.14456/jcdr-hs.2021.5.