Title: Empirical analysis of reinsurance utilisation and dependence with respect to its impact on the performance of domestic non-life stock insurance companies operating in the private sector of Pakistan

Authors: Hafiza Tahoora Iqbal; Mobeen Ur Rehman

Addresses: Comsats Institute of Information Technology, Islamabad, Pakistan ' Comsats Institute of Information Technology, Islamabad, Pakistan

Abstract: This study is based on the association that exists between profitability and reinsurance of private sector non-life stock insurers of Pakistan. Reinsurance can act as an important character in consideration of risk, risk underwriting and efficient management of claims. As insurance industry is equipped with risk coverage tools, it is time for it to provide protection from such major risks so that the potential impairment of such risks can be reduced. Insurance industry is important for the progress of a country and reinsurance is significant for the expansion of insurance industry. So, the study investigates whether the profitability is affected by reinsurance or not. The results of this study are quite in line with previous studies and signify that profitability of the firm is sensitive to change in reinsurance utilisation and has a positive relationship with it, while dependence and exposure of reinsurance do not have any impact on it.

Keywords: reinsurance; profitability; ROA; return on assets; ROE; return on equity; direct insurance; Pakistan; risk underwriting; claim management.

DOI: 10.1504/IJFSM.2014.063946

International Journal of Financial Services Management, 2014 Vol.7 No.2, pp.95 - 112

Received: 10 Jul 2013
Accepted: 12 May 2014
Published online: 27 Oct 2014 *

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