Browsing by Author "Subasinghe, R.D.T.R."

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    Impact of Investment Income and Inflation, on the Profitability of Insurance Industry(Special reference to Composite Insurance Companies in Sri Lanka)
    (Uva Wellassa University of Sri Lanka, 2012) Subasinghe, R.D.T.R.
    There is a context that Insurance Companies in the world face to the problem with their profit without Investment Income. The said issue can influence the Sri Lankan Insurance Companies too. One of primary objective of this research is to find out which insurance Companies in Sri Lanka facing the problem of earning profits without Investment Income, and the objective was achieved through calculating the Net Combined Ratio. Second objective of the research is to find out the relationship between Inflation and the Profitability of the Insurance Companies in Sri Lanka. Researcher analyzed 10 years data from 9 Composite Insurance Companies which are well performing in Sri Lanka. The simple regression and Correlation Coefficient was used to find-out the relationship between selected variables. The research reveals that most of the Insurance Companies are in critical situation that of making profits without Investment Income. Inflation Rates has negatively correlated with the Underwriting profit, Investment Income and profit before taxatitn and Investment Income positively correlated with the Investment Income.
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    A Study on Impact of Investment Income and Inflation to Profitability of Insurance Industry inSri LankanComposite Insurance Companies
    (Uva Wellassa University of Sri Lanka, 2012) Subasinghe, R.D.T.R.; Gunaratne, Y.M.C.
    Insurance Industry has become one of the booming industries in Sri Lanka since 2003 when the Insurance Board of Sri Lanka was established. Profitability of Insurance Companies basically contain two components namely underwriting profit and Investment Income. Generally, Insurance Companies manage their profits with Investment Income. According to World Insurance Report 2011, insurance companies around the globe are re-focusing on their core operations. Some lost investment income during the crisis; others face changing customer preferences; most must tackle a newly stringent regulatory environment. Hence, the above question is significant when the inflation materially affects the country's economic activities. Further, there is a negative relationship between Investment Income and Inflation (D'Arcy, 1981). Accordingly, inflation can be a significant factor to the Insurance companies' profitability. Methodology According to the objectives of the research it requires secondary data from Composite Insurance companies in Sri Lanka. To extract Composite Insurance companies, researcher used Stratified Sampling Technique and Company Annual Reports for Secondary Data Collection. Data was analyzed according to the research objectives and Net Combined Ratio was used to identify the Insurance Companies which face problem of making profits without Investment Income. Net Combined Ratio (Formula) = Net Claims Incurred + Other Expenses Net Earned Premium To identify the relationships of each Inflation and Investment Income and Investment and Profitability, a simple regression was used and the correlation was measured by using MINITAB Statistical software.