본문 바로가기
  • Home

The Determinants of Insurance Risk Profit Ratio in Korean Life Insurance Companies

  • Journal of Insurance and Finance
  • 2009, 20(1), pp.3-38
  • Publisher : Korea Insurance Research Institute
  • Research Area : Social Science > Business Management

Lee Kyonghee 1 서성민 1

1보험연구원

Accredited

ABSTRACT

This research analyzes the determinants of insurance risk profit ratio in Korean life insurance companies. Using panel data, we evaluate several factors both firmspecific variables and other socio-economic variables. We show that product portfolio(morbidity benefit vs. mortality benefit), marketing channel(direct vs.financial planner), and ownership type (domestic middle-small size company vs.foreign company) are significant variables. However, size(number of business in force) is not significant factor. Decreasing profit ratio since 2003 is related to the social and economic changes such as increasing of screen ratio in program for early detection of cancer and improvement of morbidity. These results imply that there are obvious limits on the performance management of insurance risk profit.Therefore, life insurance companies should target feasible profit level and use nonguaranteed elements. Also optimal portfolio and marketing channel strategies are necessary. Finally, life insurance companies should project future cash flow to cope with the potential deterioration of solvency.

Citation status

* References for papers published after 2022 are currently being built.