Sustainable Growth and Profitability in the Pakistani Insurance Sector: An Intellectual Capital Perspective

Abstract

In this new era of knowledge-based systems, financial institutions tend to improve as per performance standards using tangible and intangible resources. Intellectual capital (IC) gained much attention and in the recent past has encouraged the researchers to shed light on the connection of IC.The insurance companies plays a vital role in the financial system.This study investigates the impact of IC on the insurance sector's performance, i.e. sustainable growth (SGR), earnings and profitability, using value-added intellectual coefficient (VAIC) and modified value-added intellectual coefficient (MVAIC) methods. In addition, among all the IC elements, the study finds physical capital/capital employed (CE) and human capital (HC) most contributing factors in IC performance, whereas structural capital(SC) needs more focus to enhance the performance. Furthermore,the results suggest more attention towards relational capital (RC)as the study finds it's a positive impact on the performance, but it continues to remain insignificant. This study will be prospectively helpful for academics, policymakers, economists and managers.This study enlightens the IC's role in achieving sustainable growth.