Profitability determinants of cooperative Islamic insurance companies

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dc.contributor.authorSavai, Atila
dc.contributor.authorPjanic, Milos
dc.contributor.authorMitrasevic, Mirela
dc.contributor.authorMilenkovic, Nada
dc.date.accessioned2025-04-30T10:48:39Z
dc.date.available2025-04-30T10:48:39Z
dc.date.issued2025
dc.description.abstract-translatedThe aim of the paper is to investigate the profitability determinants of cooperative insurance companies in Saudi Arabia. The mentioned insurance companies conduct business activities on the largest Islamic insurance market in the world, which has a growing demand for insurance as an instrument of risk management and a meaningful potential for further growth. A particular motive for conducting this research was the fact that these companies have common characteristics with mutual insurance companies that represent one-third of the European insurance market. Taking into account the characteristics of cooperative insurance companies’ business operations and the special structure of financial reports of these insurers relying on and in accordance with the results of the latest research on this topic as profitability determinants, we use return on assets (ROA), return on equity (ROE) and earnings per share (EPS), while explanatory variables include microeconomic (company size, investment profitability, investment income ratio, operator’s fee, expense ratio, loss ratio, premium growth, risk exposure, capital adequacy, reinsurance dependence, specialization) and macroeconomic (interest rate and ekvity returns) variables. The data are collected on a quarterly basis for 28 companies from 2012 until the second quarter of 2020. We use first- and second-generation unit-root tests, heteroscedasticity test, cross-sectional dependence test, autocorrelation test, Hausman and Overid tests and multicollinearity test to determine model parameters. Due to the presence of heteroscedasticity and cross-sectional dependence, we analyze the data using Beck and Katz’s panel corrected standard errors (PCSE) method. The results suggest that the financial performance of cooperative insurance companies in Saudi Arabia is determined by expense ratio, loss ratio, specialization (general or life and composite insurer) and the value of the operator’s fee, which depends on the amount of the underwriting surplus. Taking into account the key characteristics of cooperative insurance companies, the results of our research can be used by decision makers of cooperative insurance companies in strategic and operational planning and can provide help for policymakers in other countries that use alternative insurance models.en
dc.format19 s.cs
dc.format.mimetypeapplication/pdf
dc.format.versionpublishedVersionen
dc.identifier.doihttps://doi.org/10.15240/tul/001/2025-1-011
dc.identifier.issn2336-5604 (Online)
dc.identifier.issn1212-3609 (Print)
dc.identifier.urihttp://hdl.handle.net/11025/59145
dc.language.isoenen
dc.publisherTechnická univerzita v Libercics
dc.rightsCC BY-NC 4.0en
dc.rights.accessopenAccessen
dc.subjectpanelová analýza datcs
dc.subjectSaúdská Arábiecs
dc.subjectpojištění v souladu se zákonem Shariacs
dc.subjectpanel opravil standardní chybycs
dc.subjectfinanční výkonnostcs
dc.subject.translatedpanel data analysisen
dc.subject.translatedSaudi Arabiaen
dc.subject.translatedSharia compliant insuranceen
dc.subject.translatedpanel corrected standard errorsen
dc.subject.translatedfinancial performanceen
dc.titleProfitability determinants of cooperative Islamic insurance companiesen
dc.typečlánekcs
dc.typearticleen
dc.type.statusPeer-revieweden
local.files.count1*
local.files.size860037*
local.has.filesyes*

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