Insights into Disclosure Practices and Profitability: Empirical Findings from the Insurance Industry in Bangladesh

Abstract

Corporate disclosure has a significant impact on meeting the information needs of the different stakeholders for rational decision-making. The study investigates the extent of disclosure in the annual reports. It examines the relationship between the level of corporate disclosure and profitability characteristics of the insurance companies operating in Bangladesh. In this current study, six insurance companies were taken as samples enlisted in the Dhaka Stock Exchange using the purposive sampling technique. The study results reveal that the mean values of the overall disclosure percentage of sample insurance companies have been increasing gradually in the first year and last year. The study results also reveal a significant difference in corporate disclosure percentages among the sample insurance companies. The multiple regression analysis with ordinary Least Squares (OLS) regression model is employed to assess the relationship between profitability characteristics and the corporate disclosure percentages. The results report a positive significant relationship between the corporate disclosure percentages and corporate profitability characteristics like earnings per share, gross premium, net premium, net profit after tax, return on assets, return on equity, and underwriting profit. Still, there is an insignificant relationship between net profit before tax and corporate disclosure percentages of the sample insurance companies over the period under study.