Determination of factors affecting profitability: An investigation into the Indian life insurance industry

The present research aims to identify the key determinants that influence the financial performance of Indian insurers operating in the life insurance space. The empirical study that covers the period from 2007 to 2016 uses data collected on top ten private life insurers (chosen on the basis of average of last three years’ premium collection). The performance analysis aims to identify the key factors that have an effect on return on asset, the dependent variable. The application of panel regression gives interesting results. The results show the significant influence of operating ratio, claims ratio and tangibility ratio. While the effect of the first and third ratio is negative, the operating ratio shows a positive effect. The detailed explanation is there in the main text. The other variables like liquidity ratio, size and age have an insignificant effect on the insurers’ performance.