Determinants Of The Profitability Of The Insurance Sector And Fund Creation An Applied Study On The Insurance Sector In The Kingdom Of Saudi Arabia

Abstract

The main objective of the study is to determine the factors affecting the profitability of life insurance companies operating in the Saudi Arabia market, the study was based on the published data of three life insurance companies during the period from 2016-2020, and in achieving that goal the researcher relied on using the method of factor analysis, given its statistical ability in extract and summarize the most important factors affecting the variable under study. The researcher concluded that there are several determinants that have a direct relationship with the profitability of these companies, which are (net earned premiums - profit from investment activity - other revenues), as well as the existence of an inverse relationship to the variables represented in (reinsurance commissions - net paid claims - underwriting costs - change in the value of the mathematical reserve - general and administrative expenses) with profitability. The researcher recommended the necessity of spreading awareness among believers on the necessity of assessing profitability considering the determinants that affect, as well as the necessity of applying methods for distributing these profits based on objectivity and fairness in distribution to policyholders.