Examining the Factors Affecting the Performance of Non-Life Insurance for Sustainable Development in Ethiopia
Purpose: The study aims to investigate the factors influencing the performance of general and non-life insurance companies in Ethiopia, with a specific focus on their role in supporting the country’s sustainable development. Design/Methodology/Approach: The research employed secondary data from nine non-life insurance companies over a 15-year period, applying a random effect panel data model. Of the 17 insurance companies operating in Ethiopia, nine were selected to ensure data adequacy and reliability, excluding individuals below 15 years of age. Findings: The results revealed that liquidity, loss ratio, and volume of capital were statistically significant determinants of performance in the Ethiopian general insurance sector. Conversely, factors such as age, company size, leverage ratio, and tangibility ratios showed minimal impact on performance. Practical Implications: The findings highlight the need for insurers to prioritize liquidity management, efficient loss control, and capital strengthening to enhance their performance and contribution to sustainable development. The study further suggests that government policies should emphasize building insurers’ professional capacity, encouraging innovation, and raising public awareness about insurance services. Additionally, company size—reflected in capital, efficiency, and accessibility—remains important for enhancing market reach, investment opportunities, and client trust. Originality/Value: This study contributes to the limited literature on the nexus between insurance performance and sustainable development in Ethiopia. By identifying key determinants of performance, it provides valuable insights for insurers, policymakers, and stakeholders aiming to strengthen the role of the insurance industry in the country’s sustainable economic growth.