The Impact of the Profits of Jordanian Insurance Companies on Their Financial Performance Indicators During the Corona Pandemic

Abstract

AbstractThe study aims to investigate the impact of the profits of Jordanian insurance companies on their financial performance indicators in the light Corona pandemic by comparing the financial performance indicators of insurance companies between the years 2019 (before the COVID-19 pandemic) and 2020 (during the COVID-19 pandemic). The study sample consists of (17) general insurance companies that made profits under the Corona pandemic. The study relied on the descriptive analytical approach by relying on quantitative and numerical data to describe the study sample through annual financial reports issued by the insurance industry to measure financial performance indicators for a time series of two consecutive years (2019–2020). The study found that there is an impact of the profits of insurance companies on the financial performance indicators measured by financial leverage ratios (the ratio of debts to assets), and there is no impact for the profits of insurance companies on the financial performance measured by other ratios for the year (2019) before the COVID-19 pandemic, as for the year (2020). During the COVID-19 pandemic, the study found an impact of the profits of insurance companies on the financial performance measured by (quick liquidity), and there is no impact of the profits of insurance companies on the financial performance measured by other ratios. The study therefore recommends decision-makers to seek to improve the financial performance of the insurance sector by taking this study by risk managers and regulatory authorities in order to understand the internal factors represented by financial planning, internal management and administrative efficiency, as well as external factors represented by the legal and economic environment affecting financial performance. Future studies also recommend conducting a study model on other financial sectors and the industrial and service sectors to find out how corporate profits impact the financial performance of these sectors during the COVID-19 pandemic.KeywordsInsurance company profitsFinancial performanceLiquidity ratiosLeverage ratiosJordanian insurance companies