Article: Antecedent of risk-based capital of public non-life insurance companies in Indonesia Journal: Global Business and Economics Review (GBER) 2022 Vol.26 No.2 pp.99 - 110 Abstract: The performance of the insurance service industry has an impact on the Indonesian economy, therefore insurance companies must be able to maintain their sustainability by maintaining a level of financial health, generally represented by risk-based capital (RBC). The purpose of this research is to test and analyse whether the macro indicators such as customer price index (CPI), gross domestic product (GDP), central bank interest rate (BIR); and micro indicators such as investment performance, loss ratio and total assets are antecedent of RBC. This quantitative research used nine samples of public non-life insurance companies in Indonesia and the secondary data were collected from annual financial reports from 2008-2019 and macroeconomic data were collected from Statistic Bureau Centre, then data panel regression analysis was conducted to test the research hypotheses. The results show that loss ratio, total assets and the movement of GDP are antecedent of the RBC. Total assets has relative big impact (positive) on RBC and loss ratio has relative small impact (positive) on RBC, on the other hand GDP has a relative medium impact (negative) on RBC. In other words, two micro indicators and one macro indicator have impacts on RBC. Inderscience Publishers - linking academia, business and industry through research

Title: Antecedent of risk-based capital of public non-life insurance companies in Indonesia

Authors: Jenry Cardo Manurung; Sudaryanto; Dharma Tintri Ediraras

Addresses: Gunadarma University, Jl Margonda Raya 100 Depok 1642, West Java, Indonesia ' Gunadarma University, Jl Margonda Raya 100 Depok 1642, West Java, Indonesia ' Gunadarma University, Jl Margonda Raya 100 Depok 1642, West Java, Indonesia

Abstract: The performance of the insurance service industry has an impact on the Indonesian economy, therefore insurance companies must be able to maintain their sustainability by maintaining a level of financial health, generally represented by risk-based capital (RBC). The purpose of this research is to test and analyse whether the macro indicators such as customer price index (CPI), gross domestic product (GDP), central bank interest rate (BIR); and micro indicators such as investment performance, loss ratio and total assets are antecedent of RBC. This quantitative research used nine samples of public non-life insurance companies in Indonesia and the secondary data were collected from annual financial reports from 2008-2019 and macroeconomic data were collected from Statistic Bureau Centre, then data panel regression analysis was conducted to test the research hypotheses. The results show that loss ratio, total assets and the movement of GDP are antecedent of the RBC. Total assets has relative big impact (positive) on RBC and loss ratio has relative small impact (positive) on RBC, on the other hand GDP has a relative medium impact (negative) on RBC. In other words, two micro indicators and one macro indicator have impacts on RBC.

Keywords: macroeconomic indicators; microeconomic indicators; non-life insurance; risk-based capital; RBC.

DOI: 10.1504/GBER.2022.120992

Global Business and Economics Review, 2022 Vol.26 No.2, pp.99 - 110

Received: 17 Feb 2021
Accepted: 26 Apr 2021
Published online: 21 Feb 2022 *

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Title: Antecedent of risk-based capital of public non-life insurance companies in Indonesia

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