The Impact of Financial Risks on the Profitability of Insurance Companies: A Case Study of Commercial Insurance Companies Listed on Amman Stock Exchange for the Period (2011-2022)

Abstract

The study aimed to measure the impact of financial risks on the profitability of Jordanian commercial insurance companies listed on Amman Stock Exchange for the period (2011-2022). The study sample consisted of (14) commercial insurance companies. The study relied on cross-sectional data regression models over time (Panel Data) to test the study hypotheses. The results of the study showed that there is a statistically significant negative impact of financial leverage risks and underwriting risks on the profitability of insurance companies, and there is a statistically significant negative impact of liquidity risks on the profitability of insurance companies measured by earnings per share. On the other hand, there is a statistically significant positive impact of company size on the profitability of insurance companies. The study recommended that insurance companies should not rely heavily on debt to finance their investments, and to work on managing underwriting risks in order to improve their profitability.