PROFITABILITY ANALYSIS OF INSURANCE COMPANIES USING FINANCIAL RATIOS

Ratio analysis is the primary tool for assessing the operational performance of any enterprise, including insurance companies. Identifying the key determinants of insurance company profitability requires the application of rigorous methodological instruments, among which ratio analysis occupies a central position in evaluating both operational and investment efficiency. This paper examines the profitability of the insurance sector through the lens of key financial ratios, with a particular focus on identifying the factors that exert the greatest influence on overall financial per- formance. Particular attention is paid to the relationship between claims incurred, underwriting expenses, and premium income as the primary source of revenue, as well as to return on equity (ROE) and return on assets (ROA) as key indicators of management efficiency. The findings suggest that sustainable profitability is driven not only by premium growth but also by disciplined cost management and the prudent management of technical reserves. Sustained profitability requires ongoing optimisation of operating costs and precise assessment of underwriting risks.

Keywords: insurance, financial ratios, profitability, ROE, combined ratio, corporate finance.

JEL Classification: G22, G32, M41